Module 8: Audit Collection Techniques

Question 1

Evidence is any information used by an IS auditor to determine whether the entity or data being audited follows the __ ___ or ____ and ____ ____ ____

Answer 1

Established criteria; objectives; supports audit conclusions

Question 2

Evidence: What should be considered when planning the IS audit with regards to evidence?

Answer 2

1. The type of audit evidence
2. Its use to meet objectives
3. Varying levels of reliability

Question 3

Evidence: Audit Evidence may include what examples?

Answer 3

1. IS Auditor’s Observation
2. Notes from Interviews
3. Results of Independent Confirmations by an IS auditor
4. Materials extracted from correspondences and internal documentation or contracts with external partners
5. Results of Test Procedures

Question 4

Sources of Evidence: Firsthand information from an original source

Answer 4

Primary Information

Question 5

Sources of Evidence: What are the characteristics of primary Information?

Answer 5

1. Original
2. expensive

Question 6

Sources of Evidence: Which source of information is not original and expensive

Answer 6

Secondary Information

Question 7

Sources of Evidence: involves facts about the organization

Answer 7

Internal sources

Question 8

Sources of Evidence: Involves facts about economies, market, competition

Answer 8

External sources

Question 9

Sources of Evidence: Internal sources is used in ___ and ____ measurement

Answer 9

Planning and performance

Question 10

Sources of Evidence: Facts about the world outside the organization

Answer 10

External Sources

Question 11

Sources of Evidence: What are the main examples of secondary sources?

Answer 11

Xerox copy of the original file

Question 12

Sources of Evidence: Which is more practical to use secondary or primary Information source

Answer 12

Secondary. Less expensive and doesn’t take away the reliability

Question 13

Types of Evidence: Obtained by direct inspection or observation of people, property or events

Answer 13

Physical Evidence

Question 14

Types of Evidence: Physical evidence may be documented in the form of ____ summarizing the matters inspected or observed, photographs, charts, maps, or actual samples

Answer 14

Memoranda

Question 15

Types of Evidence: consists of created information

Answer 15

Documentary evidence

Question 16

Types of Evidence: What are some examples of documentary evidence?

Answer 16

1. Letters
2. Contracts
3. Accounting Records
4. Invoices
5. Management Information

Question 17

Types of Evidence: obtained from others through statements received in response to something

Answer 17

Testimonial

Question 18

Types of Evidence: Examples of Testimonial evidence include?

Answer 18

1. Inquiries
2. Questionnaires
3. Interviews

Question 19

Types of Evidence: includes computations, comparisons, reasoning, and separation of information into components

Answer 19

Analytical evidence

Question 20

Types of Evidence: Which is the most reliable among the types audit evidences?

Answer 20

Physical Evidence

Question 21

Standards of Audit Evidence: What are the standards of Audit Evidence?

Answer 21

1. Sufficiency
2. Relevance
3. Competence

Question 22

Standards of Audit Evidence: Sufficiency, Relevance, and Competence tells what about the evidence?

Answer 22

1. Sufficiency: convincing
2. Relevance: logical
3. Competence: reliable

Question 23

Standards of Audit Evidence: What happens when audit evidences don’t meet the three standards?

Answer 23

Additional corroborative evidence is required before expressing an audit opinion

Question 24

Standards of Audit Evidence - Sufficiency: What is an essential factor in evaluating sufficiency?

Answer 24

It must be convincing enough for a prudent person to reach the same conclusion

Question 25

Standards of Audit Evidence - Sufficiency: How does sufficiency apply to sampling methods?

Answer 25

When the samples selected provide reasonable assurance that they are representative of the whole population

Question 26

Standards of Audit Evidence - Sufficiency: Rank these evidences from most to least persuasive - Auditor's Observation of auditee's procedures - Externally prepared documents - Physical examination - Auditor's inquiry of management

Answer 26

1. Physical Examination 2.Externally prepared documents 3. Auditor's Observation of the Auditee's procedures 4. Auditor's Inquiry of management

Question 27

Standards of Audit Evidence - Relevance: Evidence is relevant to a finding if?

Answer 27

It has a logical relationship to that finding

Question 28

Standards of Audit Evidence - Relevance: evidence is ____ with the ___ ____ and supports audit findings and recommendations

Answer 28

Consistent; audit objectives

Question 29

Standards of Audit Evidence - Competence: Evidence is competent to the extent that is?

Answer 29

Consistent with fact

Question 30

Standards of Audit Evidence - Competence: Evidence that is both ___ and ____ is competent

Answer 30

Available and reliable

Question 31

Standards of Audit Evidence - Relevance: Competent information is reliable and the best available through the use of ___ __ ___

Answer 31

Appropriate Audit Functions

Question 32

Determinants for Evaluating the reliability of Audit Evidence: What are the determinants?

Answer 32

1. Independence of the provider of evidence 2. Qualifications of the provide of evidence 3. Objectivity of the evidence 4. Timing of the Evidence 5. Quality of Internal Controls 6. Source of Evidence

Question 33

Determinants for Evaluating the reliability of Audit Evidence: Evidence obtained from inside the organization is more reliable (T or F)

Answer 33

False. Other way around

Question 34

Determinants for Evaluating the reliability of Audit Evidence: Signed contracts or agreements with external parties could be considered reliable if?

Answer 34

The original documents are made available

Question 35

Determinants for Evaluating the reliability of Audit Evidence: IS auditor should always consider the qualifications and functional responsibilities of the person (T or F)

Answer 35

True

Question 36

Determinants for Evaluating the reliability of Audit Evidence: IS Auditors tests are always reliable (T or F)

Answer 36

False. Auditors are subject to qualification requirements

Question 37

Determinants for Evaluating the reliability of Audit Evidence: Auditor's review of media inventory is less reliable than auditor's analysis of the efficiency of an application with personnel (T or F)

Answer 37

False. Other way around. May interpretation yung efficiency

Question 38

Determinants for Evaluating the reliability of Audit Evidence: An IS auditor should consider the time during which information exists or is available in determining the nature, timing and extent of compliance testing and, if applicable, substantive testing

Answer 38

Timing of the evidence

Question 39

Determinants for Evaluating the reliability of Audit Evidence: Evidence from an effective internal controls system is more competent than from weak control (T or F)

Answer 39

True

Question 40

Determinants for Evaluating the reliability of Audit Evidence: Evidence from the auditor is less reliable that indirectly obtained evidence (T or F)

Answer 40

False. More dapat

Question 41

Gathering Techniques: What are all the gathering techniques

Answer 41

1. Reviewing IS Organization Structures 2. Reviewing IS policies and procedures 3. Reviewing IS Standards 4. Reviewing IS Documentation 5. Interviewing Appropriate Personnel 6. Observing processes and employee performance 7. Reperformance 8. Walkthroughs

Question 42

Gathering Techniques: In reviewing IS organization techniques, what should the IS auditor do?

Answer 42

Gain an understanding and evaluate general organizational controls

Question 43

Gathering Techniques: When reviewing policies and proceudres, what should the IS auditor do?

Answer 43

1. Review if there are appropriate policies in place 2. Determine if personnel understand and follow 3. Verify if management assumes full responsibility for policies and procedures 4. Periodic reviews for appropriateness is carried out

Question 44

Gathering Techniques: in reviewing IS documentation, documentation is either in the form of what?

Answer 44

Hard copy or electronically

Question 45

Gathering Techniques: In reviewing IS documentation, what is the first step?

Answer 45

understand the existing documentation

Question 45

Gathering Techniques: in reviewing IS documentation, what controls should be in place if documentation is electronic

Answer 45

Document integrity

Question 46

Gathering Techniques: in reviewing interviewing appropriate personnel, what is a good approach

Answer 46

interview form or checklist

Question 47

Gathering Techniques: in reviewing interviewing appropriate personnel, personnel interviews are ____ in nature and never ___

Answer 47

Discovery, accusatory

Question 48

Gathering Techniques: in observing, the auditor must be what?

Answer 48

unobtrusive

Question 49

Gathering Techniques: Reperformance generally provides better evidence (T or F)

Answer 49

True

Question 50

Gathering Techniques: Reperformance is used when?

Answer 50

A combination of inquiry, observation, and examination of evidence does not provide enough assurance

Question 51

Gathering Techniques: Walkthroughs confirms

Answer 51

understanding of controls

Question 52

In interviewing and observing personnel, what should you look out for?

Answer 52

1. Actual Functions - how polices are understood and practiced 2. Actual Procedures - testing physical controls 3. Security Awareness - practice of preventive and detective controls 4. Reporting relationships - SoD

Question 53

What are the drawbacks of observation?

Answer 53

1. Observer may interfere with the observed environment 2. when noticed, may change their usual behavior