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AUD > Information Technology > Flashcards

Information Technology Flashcards

1
Q

When is an audit of IT NOT required?

A

Controls are redundant to another department

The system does not appear to be reliable and testing controls would not be an efficient use of time

Costs exceed benefit

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2
Q

When can an audit of IT be performed without directly interacting with the system?

A

System isn’t complex or complicated

System output is detailed

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3
Q

What is the role of a Database Administrator?

A

Maintains database

Restricts access

Responsible for IT internal control

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4
Q

What is the role of a Systems Analyst?

A

Recommends changes or upgrades

Liaison between IT and users

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5
Q

What is the role of the data Librarian?

A

Responsible for disc storage

Holds system documentation

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6
Q

What is the benefit of Generalized Audit Software in an audit?

A
  • Uses computer speed to quickly sort data and files- which leads to a more efficient audit
  • Compatible with different client IT systems
  • Extracts evidence from client databases
  • Tests data without auditor needing to spend time learning the IT system in detail
  • Client-tailored or commercially produced
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7
Q

What is a Relational Database?

A

Group of related spreadsheets

Retrieves information through Queries

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8
Q

What is a Data Definition Language?

A

A language that defines a database and gives information on database structure.

It maintains tables- which can be joined together.

It establishes database constraints.

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9
Q

What functions are performed by a Data Manipulation Language?

A

Maintains and queries a database

Auditor needs information- so client uses DML to get the information needed

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10
Q

What functions are performed by a Data Control Language?

A

A Data Control Language controls a database and restricts access to the database.

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11
Q

What are Check Digits?

A

A numerical character consistently added to a set of numbers.

It makes it more difficult for a fraudulent account to be set up or go undetected.

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12
Q

What is the purpose of a Code Review?

A

A Code Review tests a program’s processing logic.

Advantageous because auditor gains a greater understanding of the program.

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13
Q

What is the purpose of a Limit Test?

A

Examines data and looks for reasonableness using upper and lower limits to determine if data fits the correct range.

Did anyone score higher than 100%?

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14
Q

What is the Test Data (Test Deck) Method?

A
  • Auditor processes their input data OFFLINE with client’s computer - fake transactions are used to test program control procedures - while still in auditor’s control
  • Only transactions that interest the auditor are tested
  • Each control needs to only be tested once
  • Consist of only those valid and invalid conditions that interest the auditor
  • Processed with the client’s computer and results are compared with the auditor’s predetermined results
  • Advantage: live computer files are not affected
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15
Q

How can Operating Systems Logs be utilized during an audit?

A

Auditor can review logs to see which applications were run and by whom.

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16
Q

What is the purpose of Access Security Software?

A

Helpful in online environments

Restricts computer access - may use encryption.

17
Q

How can Library Management Software assist with an audit?

A

Library Management Software logs any changes to system/applications etc.

18
Q

How can Embedded Audit Modules in software be utilized in an audit?

A
  • Assist with audit calculations
  • Enable continuous monitoring in an audit environment that is changing
  • Weakness: requires implementation into the system design
19
Q

What is an Audit Hook?

A

An Audit Hook is an application instruction that gives auditor control over the application.

20
Q

What is the purpose of Transaction Tagging?

A

Transaction Tagging allows logging of company transactions and activities.

21
Q

How do Extended Records assist in audit trail creation?

A

Extended Records add audit data to financial records.

22
Q

How does Real Time Processing affect an audit?

A

Destroys prior data when updated

aka Destructive Updating

Requires well-documented Audit Trail

23
Q

What is the risk of auditing System outputs versus Application outputs?

A

If the auditor only audits the outputs of a computer system and doesn’t also audit the software applications- an error in the applications could be missed.

24
Q

What is a Compiler?

A

Software that translates source program (similar to English) into a language that the computer can understand

25
Q

How is Parallel Simulation utilized during an audit?

A
  • Client live data is re-processed using Generalized Audit Software (GAS) and them compared to client output
  • Sample size can be expanded without significantly increasing the audit cost
  • Controlled processing: auditor observes an actual processing run and compares the actual results to expected results based on AUDITOR’s program
  • Controlled re-processing: auditor uses an archived copy of the program to re-process transactions (Client’s program reprocessed on auditors).
26
Q

What does auditing internal control in a company’s IT environment accomplish?

A

Plan the rest of audit- Shorter audit trails that may expire- Less documentation

Assess the level of Control Risk - Unauthorized access to systems or data is more difficult to catch

Systems access controls adds another layer to separation of duties analysis

Focus should be on the general controls- new systems development- current systems changes- and program or data access control or computer ops control changes

27
Q

What are manual controls?

A
  • Internal controls performed by people
  • Suitable when judgment & discretion are required (large, nonrecurring, and unusual transactions)
  • Monitor automated controls
  • Can be easily ignored, overridden, subject to human control, and less consistent than automated controls
28
Q

What are automated controls?

A
  • Performed using IT
  • For high volume/recurring transactions
  • Not subject to same level of authorization as manual controls and may not be well-documented
29
Q

What are some IT benefits?

A
  • Ability to process large volumes of transactions
  • Timeliness/availability
  • Data analysis
  • Reduction of risk that controls will be circumvented
  • Segregation of duties
  • Monitoring of entity’s policies, procedures, performance
  • Processing consistency improved
  • Integration of audit procedures in programs
30
Q

What are some IT risks?

A
  • Potential reliance on inaccurate systems (systematic errors)
  • Unauthorized access to data (remote access)
  • Unauthorized changes to data, systems or programs
  • Failure to make changes/updates
  • Inappropriate manual intervention
  • Potential loss of data
31
Q

How are duties segregated in an IT environment?

A 
Control team
Operator
Programmer
Analyst (system)
Librarian
32
Q

How does a computerized environment affect the audit trail?

A
  • Paper audit trails are reduced
  • Tests should be performed continually
  • Electronic audit trails should be present, which are just as effective as paper trails
33
Q

What are manual audit procedures?

A

“Auditing around the computer”

  • Auditor does not test program, but rather, tests data and process it independently and then compares the results to the program results
  • Good for batch systems
  • Risks: insufficient, paper based evidence and insufficient audit procedures
34
Q

What are computer assisted audit techniques procedures (CAAT) ?

A

“Auditing through the computer”

  • Emphasis on input/processing stages of transaction processing
  • Transaction Tagging
  • Embedded Audit Modules
  • Test Data
  • Integrated Test Facility
  • Parallel Simulation
35
Q

What is Transaction Tagging?

A

Electronically tagging transactions and following them in client’s system

36
Q

What is an Integrated Test Facility?

A
  • Test data is co-mingled with live data (simulated files)
  • Test data processed to dummy accounts for separation
  • Client personnel are not informed of tests
  • Data is processed through simulated files and provide the auditor with information about the operating effectiveness of controls
  • Auditor’s input data processed ONLINE

AUD (9 decks)

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