Audit II KUA 2
b
The automated approach to audit analytics can be delivered thru: 1. Ad hoc procedures 2. Continuous execution 3. Repetitive analysis a. 1 only b. 2 and 3 c. 3 only d. 1, 2, and 3
a
A cust intended to order 100 units of product Z96014 but incorrectly ordered prod Z96015, which is not an actual prod. Which of the following ctrls most likely would detect this error? a. check digit verification b. record ct c. hash total d. redundant data check
c
All of the following procedures are common uses of audit data analytics in risk assessment procedures except: a. analyzing trends in inv costs b. ID'ing sales which didn't follow typical 3 way match ctrl in rev cycle c. comparing cash collections to sales invoices and discts in rev cycle d. calc A/R collection prds by region
d
An auditor imports a client's purchasing cycle transacs for purposes of testing auth ctrls. Which of the following is true regarding implementation of this audit data analytic? a. use of statistical sampling in perf of ADA increases auditor's confidence b. use of ADA for purch transacs often sig increases audit risk relative to traditional auditing procedures c. a disadvantage of implementation is increased costs assoc w/ADA d. testing can be more efficiently done across 100% of transacs
d
An auditor is considering choosing an ADA tool for perf a risk assessment procedure. Which of the following best describes reqs in auditing stds? a. AICPA Guide to Audit Data Analytics lists tech tools which are allowed for audits of nonissuers b. auditing stds prohibit use of artificial intelligence in risk assessment c. ASB & PCAOB stds provide a uniformly agreed upon & updated listing of allowable tools for audits of issuers d. auditing stds do not specifically address tools auditors may use in perf audit
d
An auditor is considering the approp software to perf an ADA for a substantive analytical procedure. Which of the following types of software is the auditor most likely to use? a. data visualization software b. data cleansing software c. robotic process automation software d. auditor may use any of the above depending on purposes of ADA
a
An ex of a program in which audit team would be most interested in testing auto app ctrls is a(n): a. payroll processing program b. op system program c. data mgmt system software d. utility program
a
Analysis of A/R collection prds by region is most likely a part of which of the following types of ADA? a. risk assessment procedures b. tests of ctrls c. substantive analytical procedures d. tests of details
c
As part of assessing risk of material misstatement, audit team must assess ctrl risk in computerized processing system. Initially, audit team must ID overall processing scope of system(s), which would include each of following considerations except: a. type of output that's created as a result of processing transacs thru system b. types of transacs that are processed thru system c. specific ctrl procedures that have been implemented by client to prevent/detect misstatements that could occur based on audit team's analysis d. programs & files that are accessed by system in processing transacs
c
Audit teams can obtain evidence of proper fn'ing of password access ctrl to an acg info system by: a. writing a computer program that simulates the logic of an effective password ctrl system b. selecting a random sample of the client's completed transacs to check existence of proper auth c. attempting to sign on to acg info system w/a false password d. obtaining reps from client's computer personnel that password ctrl prevents unauth entry
c
Audit teams use test data method to gain certain assurances w/respect to: a. input data b. machine capacity c. ctrl procedures contained within program d. general ctrls
d
Certain characteristics of data may affect relevance & reliability of data used in ADA. Level of aggregation is one of these characteristics. Which of the following does not illustrate differing levels of aggregation? a. number of annual transacs compared to number of weekly transacs b. a consolidated statement compared to a single seg of a statement c. a total acc bal compared to a single transac within that bal d. all of the above illustrate differing levels of aggregation
d
Ctrls used in mgmt of a computer center to minimize possibility of using an incorrect file/program are: a. ctrl totals b. record cts c. limit checks d. external labels
c
Entities often implement ctrl activities designed to prevent, detect, and limit damage related to computer frauds. Which of the following ctrl activities is an ex of a prevention type control? a. program testing ctrls after mod b. transac limit ctrls c. controlled access type ctrls d. transac log ctrls
c
For doc of an ADA to be considered sufficient, all the following should be recorded except? a. who reviewed work perf within output of ADA b. who perf work & created output of ADA c. process used to produce data examined d. ID'ing characteristics of specific items/matters tested
b
In determining reliability of data to be used by audit team, an auditor discovers data is controlled internally by acg dpt. Which of the following is most likely step auditor would take after learning of this info? a. auditor should rely on data & continue to perf ADA b. auditor should consider obtaining info from a more reliable source b4 continuing w/ADA c. auditor should ask mgmt if info can be relied upon d. auditor should not rely on data & perf a dif procedure to obtain sufficient, approp audit evidence
d
In order to be considered sufficient, doc should be prepared so that an experienced auditor, w/no prior connection w/engagement can understand I. nature, timing, and extent of procedures perf II. difficulty of audit III. results of procedures and evidence obtained IV. conclusions reached and sig judgements made a. I, II, III, and IV b. III and IV c. I and III d. I, III, and IV
d
In which of the following circumstances would an auditor expect to find that an entity had implemented automated ctrls to reduce risks of misstatement? a. when errors are difficult to predict b. when misstatements are difficult to define c. when large, unusual, or nonrecurring transacs req judgement d. when transacs are high vol & recurring
d
Select the proper order in perf ADA: 1. Eval results and conclude on whether purpose and specific objs of perf ADA have been achieved 2. Consider relevance & reliability of data used c. Plan ADA 4. Perf ADA 5. Access & prepare data for purposes of ADA a. 5, 3, 2, 4, 1 b. 2, 3, 5, 4, 1 c. 2, 5, 3, 4, 1 d. 3, 5, 2, 4, 1
a
Which of the following automated app ctrls would offer reasonable assurance that inv data were completely & accurately entered? a. sequence checking b. batch totals c. limit tests d. check digits
b
The client's computerized exception reporting system helps audit teams conduct a more efficient audit bc it: a. condenses data sig b. highlights abnormal conditions c. decreases necessary level of tests of computer ctrls d. is an efficient computer input ctrl
d
The dif between assessing ctrl risk for IT ctrl activities vs. assessing ctrl risk for manual ctrl activities is best described as follows: a. in a manual enviro it's important for auditor to gain an understanding of internal ctrl activity b4 assessing ctrl risk b. in an IT enviro, it's not important to gain an understanding of internal ctrl activity b4 assessing ctrl risk c. in an IT enviro, it's likely that ctrl risk will be assessed as low on largely all audit engagements d. assessment process that needs to be undertaken for IT ctrls is essentially same as would be taken for manual ctrls
c
The first step of planning an ADA is: a. select techniques & tools used for perf the ADA b. doc the obj of the ADA c. determine overall purpose & specific objs of ADA d. select ADA that's best suited for purpose
b
Which of the following ctrls most likely would ensure that an org can reconstruct its fin records? a. system flowcharts provide accurate descriptions of computer ops b. backup files are stored in a location sep from OG copies c. hardware ctrls are built into computer by computer manufacturer d. personnel who are ind of data input perf parallel simulations
d
To determine the reliability of data, auditor may consider all but which of the following? a. process used to produce the data b. nature & source of the data c. extent of other audit procedures d. whether auditor's system has been subject to reliability testing
b
To obtain evidence that ctrls over access to computer programs are properly functioning, audit teams most likely would a. examine transac log to discover whether any transacs were lost/entered twice due to system malfunction b. enter invalid ID #s/passwords to ascertain whether system rejects them c. create checkpts at periodic intervals after data processing to test for unauth use of system d. vouch a random sample of processed transacs to assure proper auth
d
When ID'ing and assessing inherent risk thru use of audit data analytics, what type of analytic would an auditor most likely perf first? a. detail analysis of specific sales transacs b. dimension analysis of sales transacs by region c. trend analysis of sales by month d. comparison of sales rev to prior prd and expectations
c
When auditing a client in merch biz, an auditor became concerned that client was recording fraudulent credit sales. Which of the following procedures would've most likely alerted them to this potential fraud? a. observing credit sales figure on IS b. recalc dep on fixed assets c. analyzing cash receipts as a % of sales by mo d. analyzing gross profit % by class of rev
d
When documenting an ADA, all of the following must be included in audit doc except: a. name of specific auditor performing the work b. conclusions reached c. date the work was finished d. underlying data used to generate graphics or visualization as part of ADA
c
When documenting an Audit Data Analytic (ADA), an experienced auditor with no prior connection to the engagement should be able to understand all these elements of the ADA except: a. results of procedures perf and evidence obtained b. nature, timing, and extent of procedures perf c. the software used in perf the ADA d. conclusions reached and sig judgements made
a
When perf an ADA, which of the following best describes an approp sequence used by an auditor for risk assessment purposes? a. an auditor develops an audit plan after eval'ing results of risk assessment ADA b. an auditor evals results of a data analytic chosen based off of audit plan c. an auditor cleanses client's data after modeling ADA req by audit plan d. auditor models an ADA based on eval of audit plan
c
When processing ctrls within IT enviro may not leave visible evidence that could be inspected by audit teams, teams should: a. make corroborative inquiries b. observe sep of duties of personnel c. review transacs submitted for processing and compare them to related output d. review run manual
d
When using test data, why are audit teams req to prepare only one transac to test each IT ctrl? a. speed & efficiency of computer results in reduced sample sizes b. RMM is typically lower in an IT envrio c. audit teams generally perf more extensive substantive testing in an IT enviro, resulting in less need to test processing ctrls d. in an IT enviro, each transac is handled in an identical manner
d
Which aspect of data is not important for data used in ADA? a. reliability b. completeness c. relevance d. none of these choices are correct
d
Which of the following is a common use of ADA in perf tests of ctrls? a. auditor perfs an aging of A/R b. auditor conducts a trend analysis on inv costs c. auditor runs a predictive model of int exp d. auditor perfs journal entry exception testing for empls entry amt limits
d
Which of the following is correct regarding including client data in audit doc for an issuer? a. auditors are req to retain client's data in doc for 7 yrs b. auditors should always include client data in their doc to enable an experienced auditor w/no prior connection to engagement to replicate testing c. client data should never be included in doc d. there's no specific req to include client data in auditing doc
d
Which of the following is not a potential explanation of an outlier identified as a result of an ADA? a. outlier is a duplicate item in pop b. outlier is a missing item in pop c. outlier is an item w/elevated risk d. all of above are potential explanations of outliers
b
Which of the following is not a typical prob found by auditors when cleansing client data for purposes of perf an ADA? a. some fields may be empty and thus cause errors during analysis b. some fields may not be sorted in numerical order and req sorting for ID'n of outliers c. some date fields may contain letters or be in wrong format d. some fields may have country-specific difs such as currency
c
Which of the following is not an ex of an input ctrl? a. valid sign tests b. hash totals c. run to run totals d. check digits
a
Which of the following is not true w/respect to test data approach for eval'ing computer ctrls? a. test data are created for a sep entity and are run simultaneously w/actual client's data b. manual results of processing test data are compared to results of processing these data thru client's computerized processing system c. audit teams consider potential errors and conditions of int in generating test data d. only one type of each error transac needs to be included in test data
d
Which of the following is true w/respect to fraud risk factors in an IT enviro? a. empls in an IT enviro are highly skilled b. audit teams cannot eval acg info system during yr c. higher dollar amts are involved in an IT enviro d. empls have increased access to info systems and computer resources in an IT enviro
d
Which of the following statements are true regarding use of a systems generated report as audit evidence? a. auditor should eval whether info is sufficiently precise and detailed for purposes of audit b. auditor should test accuracy and completeness of info c. neither of above answers are actions auditors should take for systems generated reports d. both A and B are correct
b
Which of the following statements most likely reps a ctrl consideration for an entity that perfs its acg using mobile computing devices? a. it's usually difficult to detect arithmetic errors b. unauth persons find it easy to access computer & alter data files c. transacs are coded for acc classifications b4 they're processed on computer d. random errors in report printing are rare in packaged software systems
a
Which of the following would not be considered when planning an ADA? a. determine sample of pop to be analyzed b. determine overall purpose and specific objs of ADA c. determine relevant FS assertions d. all of above would be considered during planning of ADA
a
Which of the following would occur during planning stage of ADA? a. auditor must determine nature, timing, and extent of work that will be completed as part of ADA b. auditor can conclude that no addtnl RMM is present in pop items c. auditor may need to subject client systems to reliability testing d. auditor must consider whether data has a logical connection to purpose of audit procedure
