Module H HW Flashcards Preview

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Flashcards in Module H HW Deck (26):
1

1. When weaknesses exist that could lead to computer fraud, the best strategy is to have the client help audit teams plan and execute technical
procedures to study and evaluate the system.
True
False

False

2

2. The major phases in the audit team’s study of internal control are the same in an automated transaction processing environment as those in a manual processing environment.
True
False

True

3

3. Computer librarians are primarily responsible for operating the computer for each application system.
True
False

False

4

4. The basic concept of test data is that once a computer is programmed to handle transactions in a certain way, every transaction will be handled in the same way.
True
False

True

5

5. Computer operators should have complete access to programs and application documentation.
True
False

False

6

6. Which of the following is likely to be of least importance to audit teams when obtaining an understanding of the computer controls in an
organization with a computerized processing system?
A. Controls over source documents.
B. Separation of duties within the computer function.
C. Relationship between costs and benefits of computer operations.
D. Documentation maintained for accounting applications.

Relationship between costs and benefits of computer operations.

7

7. Check digits are often used to detect coding errors or keying errors such as the transposition of digits.
True
False

True

8

8. The evaluation of computer controls with simulated data processed through the client's computer programs is referred to as
A. test data.
B. parallel simulation.
C. database querying.
D. integrated test facility.

test data.

9

9. To test the operating effectiveness of computer controls, audit teams can use each of the following methods except
A. processing actual client transactions through an auditor-created program.
B. observing the separation of duties of client personnel.
C. creating fictitious transactions for processing through the client’s computer programs separately from actual client transactions.
D. creating a “dummy entity” and processing simulated transactions along with actual transactions.

observing the separation of duties of client personnel.

10

10. Which of the following error conditions would not be detected through the use of batch totals?
A. A transposition of numbers in a numeric field.
B. Failure to enter a valid transaction through input error.
C. Entry of an unauthorized transaction supported by documentary evidence.
D. Erroneously entering the same transaction twice.

Entry of an unauthorized transaction supported by documentary evidence.

11

11. A program description should contain a program flowchart, a listing of the program source code, and a record of all program changes.
True
False

True

12

12. If an entity’s general controls are ineffective, audit teams would likely gain additional assurance through increased testing of their automated application controls.
True
False

False

13

13. One major difference in an automated transaction processing environment compared to a manual processing environment is the existence of systematic, rather than random, errors.
True
False

True

14

14. Which of the following is not a category of general controls?
A. Processing controls.
B. Access to programs and data controls.
C. Computer operations controls.
D. Program change controls.

Processing controls.

15

15. Outside hackers are the biggest information security risk at most companies.
True
False

False

16

16. The most important preventive controls for computer fraud are those that limit access to computers.
True
False

True

17

17. Which of the following is not a major difference between a manual processing environment and an automated transaction processing environment?
A. An automated transaction processing environment has an increased level of human involvement.
B. A hard copy “audit trail” is less likely to exist in an automated transaction processing environment than a manual processing
environment.
C. Random errors are more likely in a manual processing environment than an automated transaction processing environment.
D. An automated transaction processing environment requires data to be converted into electronic format, which introduces the
possibility of input errors.

An automated transaction processing environment has an increased level of human involvement.

18

18. The use of the systems development life cycle is an example of an access to programs and data control.
True
False

False

19

19. When clients use information technology (IT), the audit team’s general responsibilities do not change.
True
False

True

20

20. The three kinds of automated application controls are authorization controls, processing controls, and output controls.
True
False

False

21

21. Header and trailer labels are examples of external labels.
True
False

False

22

22. General controls apply to all applications of an accounting information system.
True
False

True

23

23. A numerical field appended to an identification number that serves as an input control is a(n)
A. valid character test.
B. hash total.
C. batch total.
D. check digit.

check digit.

24

24. The three phases of the audit team’s evaluation of internal IT controls are obtaining an understanding, assessment, and testing.
True
False

True

25

25. An audit team cannot merely rely on information produced by the entity’s accounting information system without testing general controls.
True
False

True

26

26. The tools and techniques applicable to auditing in an automated environment should not include those that
A. use program analysis techniques.
B. use simulated or dummy data.
C. operate on a real-time basis with actual data.
D. audit around the computer.

audit around the computer.