Study Unit 7 Study Session Questions
A document flowchart represents the A.Flow of forms that relate to a particular transaction through an organization. B.Possible combinations of alternative logic conditions and corresponding courses of action for each condition in a computer program. C.Sequence of logical operations performed during the execution of a computer program. D.Flow of data through a series of operations in an automated data processing system.
A
An advantage of using systems flowcharts to document information about internal control instead of using internal control questionnaires is that systems flowcharts A.Provide a visual depiction of clients' activities. B.Indicate whether controls are operating effectively. C.Reduce the need to observe clients' employees performing routine tasks. D.Identify internal control deficiencies more prominently.
A
An auditor frequently uses flowcharts to determine whether there is A.Inefficiency and lack of controls. B.Satisfactory performance of an operation. C.Authority to meet the performance criteria. D.Sufficient but not excessive personnel assigned to an operation.
A
Graphical notations that show the flow and transformation of data within a system or business area are called A.Data flow diagrams. B.Conceptual data models. C.Program structure charts. D.Action diagrams.
A
Internal auditors often flowchart a control system and reference the flowchart to narrative descriptions of certain activities. This is an appropriate procedure to A.Gain the understanding necessary to test the effectiveness of the system. B.Determine whether the system meets established management objectives. C.Determine whether the system can be relied upon to produce accurate information. D.Document that the system meets international auditing requirements.
A
Of the following, which is the most efficient source for an auditor to use to evaluate a company's overall control system? A.Control flowcharts. B.Copies of standard operating procedures. C.Copies of industry operating standards. D.A narrative describing departmental history, activities, and forms usage.
A
The internal auditor wishes to develop a flowchart of (1) the process of receiving sales order information at headquarters, (2) the transmission of the data to the plants to generate the shipment, and (3) the plants' processing of the information for shipment. The internal auditor should A.Start with the receipt of a sales order from a sales representative and "walk through" both the manual and computerized processing at headquarters and the plant until the goods are shipped and billed. B.Obtain a copy of the plants' systems flowchart for the sales process, interview relevant personnel to determine if any changes have been made, and then develop an overview flowchart which will highlight the basic process. C.Start with a shipment of goods and trace the transaction back through the origination of the sales order as received from the sales representative. D.Start with management's decisions to set sales prices. Gather internal documentation on the approval process for changing sales prices. Complement documentation with a copy of the program flowchart. Prepare an overview flowchart that links these details.
A
Which of the following is a true statement comparing a horizontal flowchart with a vertical flowchart? A.A horizontal flowchart brings into sharper focus the assignment of duties and independent checks on performance. B.A horizontal flowchart is usually longer. C.A horizontal flowchart does not provide as broad a picture at a glance. D.A horizontal flowchart provides more room for written descriptions that parallel the symbols.
A
Which of the following tools would best give a graphical representation of a sequence of activities and decisions? A.Flowchart. B.Run chart. C.Control chart. D.Histogram.
A
Document has been generated by a manual operation.
An upside down rombus to a document symbol
A flowchart of process activities and controls may provide A.An indication of where fraud has occurred in a process. B.Information on where fraud could occur. C.Information on the extent of a past fraud. D.No information related to fraud prevention.
B
An auditor's flowchart of a client's accounting system is a diagrammatic representation that depicts the auditor's A.Assessment of the control environment's effectiveness. B.Understanding of the system. C.Assessment of the risks of material misstatement. D.Identification of weaknesses in the system.
B
In documenting the procedures used by several interacting departments the internal auditor will most likely use a(n) A.Internal control questionnaire. B.Horizontal (or systems) flowchart. C.Vertical flowchart. D.Gantt chart.
B
The diamond-shaped symbol is commonly used in flowcharting to show or represent a A.Process or a single step in a procedure or program. B.Decision point, conditional testing, or branching. C.Terminal output display. D.Predefined process.
B
Which method of evaluating internal controls during the preliminary survey provides the internal auditor with the best visual grasp of a system and a means for analyzing complex operations? A.A questionnaire approach. B.A flowcharting approach. C.A detailed narrative approach. D.A matrix approach.
B
An internal auditor reviews and adapts a systems flowchart to understand the flow of information in the processing of cash receipts. Which of the following statements is true regarding the use of such flowcharts? The flowcharts A.Are generally kept up to date for systems changes. B.Show specific control procedures used, such as edit tests that are implemented and batch control reconciliations. C.Are a good guide to potential segregation of duties. D.Show only computer processing, not manual processing.
C
The normal sequence of documents and operations on a well-prepared systems flowchart is A.Top to bottom and right to left. B.Bottom to top and right to left. C.Top to bottom and left to right. D.Bottom to top and left to right.
C
An internal auditor develops a flowchart primarily to A.Detect errors and irregularities. B.Reduce the need for interviewing auditee personnel. C.Determine functional responsibilities. D.Analyze a system and identify internal controls.
D
When documenting internal control, the independent auditor sometimes uses a systems flowchart, which can best be described as a A.Pictorial presentation of the flow of instructions in a client's internal computer system. B.Graphic illustration of the flow of operations that is used to replace the auditor's internal control questionnaire. C.Diagram that clearly indicates an organization's internal reporting structure. D.Symbolic representation of a system or series of sequential processes.
D
Which of the following best describes the purpose of the cylindrical symbol on a flowchart? A.Connect points on the same page. B.Computer operations. C.Input or output used. D.Storage.
D
The symbol employed to represent employees' checks printed by the computer is
The document symbol
The symbol employed to determine if an employee's wages are above or below the maximum limit for FICA taxes is
The wide triangle
The symbol used to represent the file of hard-copy, computer-generated payroll reports kept for future reference is
Upside down triangle