Auditing (Ch. 12) Flashcards Preview

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Flashcards in Auditing (Ch. 12) Deck (29):

Automated work paper

allows internal and external auditors to automate and standardize specific audit tests and audit documentation


Auditing around the computer

audit approach whereby an auditor follows a company's audit trail up to the point at which accounting data enter the computer and then picks these data up again when they reappear in processed form as computer output


Auditing through the computer

audit approach whereby and auditor follows a company's audit trail through the internal computer operations phase of automated data processing


Auditing with the computer

audit approach whereby the auditor uses the computer to aid in performing various auditing procedures


Compliance testing

procedures performed by auditors to ensure the general and application controls are in place and working as prescribed


Computer-assisted audit techniques (CAAT)

use of computer processes or specialized software to perform audit functions, such as sorting data to detect duplicate accounts payable invoice numbers


Continuous Auditing

the use of tools that allow auditing to occur even when an auditor is not present. XBRL can support this concept


Fraud triangle

includes three elements indicating potential for fraud; Motive, Opportunity, and Rationalization


Generalized audit software (GAS)

computer packages that enable auditors to review computer files without continually rewriting processing programs


General-use software

used by auditors as productivity tools for improving their work


Information systems risk assessment

method used by an auditor to evaluate the desirability of IT-related controls for a particular aspect of business risk


Information technology (IT) governance

ensuring that information technology risks are controlled and also that IT in an organization is deployed strategically to meet objectives


Integrated test facility (ITF)

used by auditors to test a company's computer programs. A more comprehensive test technique that is used to audit an AIS in an operational setting


Parallel simulation

a control testing method used by auditors to create a second system that duplicates a portion of the clients system.


Program change control

a set of internal control procedures developed to ensure against unauthorized program changes


Risk based audit

an approach that provides auditors with a good understanding of the errors and irregularities that can occur in a company's AIS environment and the related risks and exposures


Test data

a set of transactions that examine the range of exception situations that might occur under normal processing conditions


Third party assurance services

audit and assessment services offered by independent third parties to provide business users and individual consumers with some level of comfort over Internet transactions. Specialized audits of Internet systems and websites


CA web trust

is a third party assurance seal that promotes data, privacy and security. in addition to reliable business, business practices and integrity in processing transactions


trust services

include both; web trust and systrust. Assurance services that evaluate the reliability of information systems with respect to their availability, security, integrity and maintainability


automated working paper software

These programs can help auditors create common size income statements and balance sheets that show account balances as percentages


Certified Information Systems Auditor (CISA)

a certification given by the Informations Systems Audit and Control Association



Provides auditors and businesses with guidance in managing and controlling for business risk associated with IT environments


Information Technology (IT) auditing

Involves evaluating the computers role in achieving audit and control objectives


Parallel simulation

The auditor uses live input data, rather than test data, in a program actually written or controlled by the auditor


Sarbanes-Oxley Act

An important feature of this legislation is commonly referred to as section 404 reviews


4 steps performed in a "risk-based" audit approach

1. Determine the risk- impact and probability
2. Evaluate controls present-has to be operational
3. Evaluate weaknesses
4. Identify control procedures to minimize each threat or lack of control


5 principles of trust services

1. Security (unauthorized access)
2. Availability
3. Processing
4. Online Privacy - personal info
5. Protection of confidential info


5 approaches to continuous auditing

-continuous simulation
-exception reporting
-audit hooks
-tranaction tagging