3.1 Online Auditing Techniques (Doshi)

Question 1

Online Audit Techniques

Answer 1

(1) Integrated Test Facility
(2) System Control Audit Review File (SCARF)
(3) Snapshot Technique
(4) Audit Hook
(5) Continuous and Intermittent Simulation

Question 2

Integrated Test Facility (ITF)

Answer 2

(1) A fictitious entity is created in a live environment .
(2) The auditor can enter dummy or test transactions to verify the processing and results of these transactions for correctness

Question 3

System Control Audit Review File (SCARF)

Answer 3

An embedded (inbuilt) audit module is used to continuously monitor transactions.

Question 4

SCARF files

Answer 4

Records only transactions which are of special audit significance which have related specified limits or transactions related to deviation/exception.

Question 5

Snapshot Technique

Answer 5

In this technique, snaps (pictures) are taken of the transactions as transaction moves through various stages in the application system

In this technique, three important considerations are (i) location where snaps to be taken (ii )time of capturing snaps and (iii) reporting of snapshot data captured.

Question 6

Audit Hook

Answer 6

These are audit software that captures suspicious transactions. Criteria for suspicious transactions are designed by auditors as per their requirement.

Question 7

When is audit hook useful?

Answer 7

Audit hook is useful when early detection of error or fraud is required

Question 8

Continuous and Intermittent Simulation (CIS)

Answer 8

(1) This technique can be used whenever the application system uses the database management system (DBMS)
(2) DBMS reads the transaction which is passed to CIS. If the transaction is as per selected criteria, then CIS examines the transaction for correctness

Question 9

When audit trail is required answer has to be

Answer 9

SNAPSHOT

Question 10

When early detection of error or irregularities is required- answer has to be

Answer 10

AUDIT HOOK

Question 11

Best technique to identify transactions as per pre-defined criteria-answer has to be CIS.

Answer 11

CIS

Question 12

When fictitious entity is created in live production-answer has to be

Answer 12

ITF.

Question 13

Purpose of System Control Audit Review File SCARF

Answer 13

The technique is used to collect data for special audit purpose.

Question 14

When is SCARF useful?

Answer 14

when regular processing cannot be interrupted.