M9-The Effect of Information Technology on the Audit Flashcards
Embedded audit modules are sections of the application program code that collect transaction data for the auditor. Embedded audit modules are usually built into the application program when the program is developed. This would require that the auditor be involved in the system design of the application to be monitored. (true or false)
true
Such modules allow the auditor to capture specific data as transactions are being processed.
An integrated test facility uses test data commingled with actual data to test transactions. (true or false)
true
Parallel simulation involves writing a computer program that duplicates the logic of a client’s program, using identical data as input, and comparing output. (true or false)
true
Test data consists of “dummy” data run through the client’s computer system. The data should be processed under the auditor’s control. (true or false)
true
It is easier to access and alter microcomputer data files than manually prepared data files. Microcomputer access security is difficult to maintain because of the increased number of data entry points and the potential ability to defeat access controls. (true or false)
true
Test data allows the auditor to determine whether adequate controls exist over data processing. Test data consists of fictitious entries or inputs that are processed through the client’s computer system under the control of the auditor. The client’s computerized payroll system should have adequate controls to prevent input of invalid employee ID numbers. (true or false)
true
When using computers in an auditing task, audit documentation may not contain readily observable details of calculations (e.g., present value calculations). In order to review assistants’ work, a supervisor may have to examine the formulas used on the computer rather than simply examining the audit documentation. (true or false)
true
The assessment of control risk is based on auditor judgment. A computer cannot replace professional auditor judgment in assessing control risk. (true or false)
true
The test data approach refers to a technique in which the client’s application program is used to process a set of test data, the results of which are already known by the auditor. If the client’s program is operating effectively, it should generate the same results determined by the auditor. (true or false)
true
One of the primary benefits of using generalized audit software is the ability to access client data stored in computer files without having a detailed understanding of the client’s hardware and software features. (true or false)
true
