Question 1

For most companies,which of the following is the least critical application for disaster recovery purposes?

Accepted Answer

A)  month-end adjustments
B)  accounts receivable
C)  accounts payable
D)  order entry/billing

Question 2

Why should new systems development activities be segregated from the program change (maintenance)function?

Accepted Answer

Combining these functions increases the ...

Question 3

Operations fraud includes

Accepted Answer

A)  altering program logic to cause the application to process data incorrectly
B)  misusing the firm's computer resources
C)  destroying or corrupting a program's logic using a computer virus
D)  creating illegal programs that can access data files to alter, delete, or insert values

Question 4

What is scavenging?

Accepted Answer

Scavenging involves ...

Question 5

The least important item to store off-site in case of an emergency is

Accepted Answer

A)  backups of systems software
B)  backups of application software
C)  documentation and blank forms
D)  results of the latest test of the disaster recovery program

Question 6

The distributed data processing approach carries some control implications of which accountants should be aware.Discuss two.

Accepted Answer

Incompatibility of hardware and software...

Question 7

IT auditing is a small part of most external and internal audits.

Accepted Answer

A) True 
 B)False

Question 8

A strong internal control system will reduce the amount of substantive testing that must be performed.

Accepted Answer

A) True 
 B)False

Question 9

Changing the Hours Worked field in an otherwise legitimate payroll transaction to increase the amount of the paycheck is an example of data collection fraud.

Accepted Answer

A) True 
 B)False

Question 10

Corporate management (including the CEO)must certify monthly and annually their organization's internal controls over financial reporting.

Accepted Answer

A) True 
 B)False

Question 11

External auditors can cooperate with and use evidence gathered by internal audit departments that are organizationally independent and that report to the audit committee of the board of directors.

Accepted Answer

A) True 
 B)False

Question 12

External auditing is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization.

Accepted Answer

A) True 
 B)False

Question 13

Supervision in a computerized environment is more complex than in a manual environment for all of the following reasons except

Accepted Answer

A)  rapid turnover of systems professionals complicates management's task of assessing the competence and honesty of prospective employees
B)  many systems professionals have direct and unrestricted access to the organization's programs and data
C)  rapid changes in technology make staffing the systems environment challenging
D)  systems professionals and their supervisors work at the same physical location

Question 14

Statements on Auditing Standards recommendations must be followed by every member of the profession unless it can be shown why a standard does not apply in a given situation.

Accepted Answer

A) True 
 B)False

Question 15

List three pairs of system functions that should be separated in the centralized computer services organization.Describe a risk exposure if the functions are not separated.

Accepted Answer

separate systems development from data p...

Question 16

Substantive tests include

Accepted Answer

A)  examining the safety deposit box for stock certificates
B)  reviewing systems documentation
C)  completing questionnaires
D)  observation

Question 17

Distinguish between inherent risk and control risk.How do internal controls and detection risk fit in?

Accepted Answer

Inherent risk is associated with the uni...

Question 18

Adequate backups will protect against all of the following except

Accepted Answer

A)  natural disasters such as fires
B)  unauthorized access
C)  data corruption caused by program errors
D)  system crashes

Question 19

The same internal control objectives apply to manual and computer-based information systems.

Accepted Answer

A) True 
 B)False

Question 20

Discuss the advantages and disadvantages of the second site backup options.

Accepted Answer

Second site backups include em...

Exam 14: Auditing It Controls Part I: Sarbanes-Oxley and It Governance

A strong internal control system will reduce the amount of substantive testing that must be performed.

Correct AnswerverifiedShow Answer

The distributed data processing approach carries some control implications of which accountants should be aware.Discuss two.

Correct AnswerverifiedIncompatibility of hardware and software...View AnswerShow Answer

List three pairs of system functions that should be separated in the centralized computer services organization.Describe a risk exposure if the functions are not separated.

Correct Answerverifiedseparate systems development from data p...View AnswerShow Answer

The same internal control objectives apply to manual and computer-based information systems.

Correct AnswerverifiedShow Answer

The least important item to store off-site in case of an emergency is

Correct AnswerverifiedShow Answer

External auditors can cooperate with and use evidence gathered by internal audit departments that are organizationally independent and that report to the audit committee of the board of directors.

Correct AnswerverifiedShow Answer

Changing the Hours Worked field in an otherwise legitimate payroll transaction to increase the amount of the paycheck is an example of data collection fraud.

Correct AnswerverifiedShow Answer

Distinguish between inherent risk and control risk.How do internal controls and detection risk fit in?

Correct AnswerverifiedInherent risk is associated with the uni...View AnswerShow Answer

Operations fraud includes

Correct AnswerverifiedShow Answer

Substantive tests include

Correct AnswerverifiedShow Answer

Statements on Auditing Standards recommendations must be followed by every member of the profession unless it can be shown why a standard does not apply in a given situation.

Correct AnswerverifiedShow Answer

External auditing is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization.

Correct AnswerverifiedShow Answer

What is scavenging?

Correct AnswerverifiedScavenging involves ...View AnswerShow Answer

Adequate backups will protect against all of the following except

Correct AnswerverifiedShow Answer

Why should new systems development activities be segregated from the program change (maintenance)function?

Correct AnswerverifiedCombining these functions increases the ...View AnswerShow Answer

Discuss the advantages and disadvantages of the second site backup options.

Correct AnswerverifiedSecond site backups include em...View AnswerShow Answer

Corporate management (including the CEO)must certify monthly and annually their organization's internal controls over financial reporting.

Correct AnswerverifiedShow Answer

IT auditing is a small part of most external and internal audits.

Correct AnswerverifiedShow Answer

Supervision in a computerized environment is more complex than in a manual environment for all of the following reasons except

Correct AnswerverifiedShow Answer

For most companies,which of the following is the least critical application for disaster recovery purposes?

Correct AnswerverifiedShow Answer

Correct Answer
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Incompatibility of hardware and software...
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Correct Answer
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separate systems development from data p...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Inherent risk is associated with the uni...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Scavenging involves ...
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Correct Answer
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Combining these functions increases the ...
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Correct Answer
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Second site backups include em...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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