Lesson 7/8 Flashcards
What are the two different sampling methods?
Statistical and non statistical
What is Computer Assisted Audit Technique?
Data which is put in to see if the system processes it correctly
What is an advantage of Computer Assisted Audit Techniques?
It is cost effective as long as systems are not often changed
What is a disadvantage of Computer Assisted Audit Techniques?
It can be inconvenient to use the client’s live systems
Why do auditors use data analytics?
To compare the last time an item was bought to the last time it was sold
What are control activities?
Policies that are designed to ensure management objectives are being carried out
What are the two different IT controls?
Application controls and general controls
What is Documenting Systems Methods?
Ways to record and describe processes, controls and procedures
What are the different Documenting Systems Methods?
Narrative notes
Flow charts
Internal control questionnaire
Internal control evaluation
What are the advantages and disadvantages of narrative notes?
A: Simple and easy to understand
D: Time consuming
What are the advantages and disadvantages of flow charts?
A: Easy to view entire system
D: Difficult to change, still need narrative notes
What are the advantages and disadvantages of an internal control questionnaire?
A: Quick to prepare
D: Controls may be overstated
What are the advantages and disadvantages of an internal control evaluation?
A: Controls are less likely to be overstated
D: Checklist may not be relevant to every client
What is an internal audit?
Independent assurance that is designed to evaluate a company’s control
What are the advantages and disadvantages of outsourcing an internal audit?
A: Broader range of expertise
D: Loss of flexibility, high fees
