Audit

Analysis of accounts receivable collection periods by region is most likely a part of which of the following types of ADA?

Risk assessment procedures

When identifying and assessing inherent risk through the use of audit data analytics, what type of analytic would an auditor most likely perform first?

Comparison of sales revenue to prior period and expectations.

Which of the following would reduce the effectiveness of internal control in an accounting information system?

Computer operators have access to operator instructions and detailed program lists

Audit teams can obtain evidence of the proper functioning of password access control to a accounting information system by

Attempting to sign on to the accounting information system with a false password

When using test data, why are audit teams required to prepare only one transaction to test each IT control?

In an IT environment, each transaction is handled in an identical manner.

Controls used in the management of a computer center to minimize the possibility of using an incorrect file or program are

External labels.

The first step of planning an ADA is:

determine the overall purpose and specific objectives of the ADA

The automated approach to audit analytics can be delivered through: i. Ad hoc procedures ii. Continuous execution iii. Repetitive analysis

ii and iii

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:

the software used in performing the ADA

Which of the following would occur during the planning stage of Audit Data Analytics?

Auditor must determine the nature, timing, and extent of the work that will be completed as part of the ADA

Audit teams use the test data method to gain certain assurances with respect to

Control procedures contained within the program

An example of a program in which the audit team would be most interested in testing automated application controls is a(n)

Payroll processing program.

When processing controls within the accounting information system may not leave visible evidence that could be inspected by audit teams, the teams should

Review transactions submitted for processing and compare them to related output.

An auditor imports a client's purchasing cycle transactions for the purposes of testing authorization controls. Which of the following is true regarding the implementation of this audit data analytic?

Testing can be more efficiently conducted across 100% of transactions.

Which of the following is a common use of ADA in performing tests of controls?

The auditor performs journal entry exception testing for employee entry amount limits.

For documentation of an ADA to be considered sufficient, all the following should be recorded except?

The process used to produce the data examined.

Which of the following is correct regarding including client data in audit documentation for an issuer?

There is no specific requirement to include client data in auditing documentation

In which of the following circumstances would an auditor expect to find that an entity had implemented automated controls to reduce risks of misstatement?

When transactions are high volume and recurring

All of the following procedures are common uses of audit data analytics in risk assessment procedures except

comparing cash collections to sales invoices and discounts in the revenue cycle

When auditing a client in the merchandising business, an auditor became concerned that the client was recording fraudulent credit sales. Which of the following procedures would have most likely alerted them to this potential fraud?

Analyzing cash receipts as a percentage of sales by month

Which of the following automated application controls would offer reasonable assurance that inventory data were completely and accurately entered?

Batch totals

A customer intended to order 100 units of product Z96014 but incorrectly ordered product Z96015, which is not an actual product. Which of the following controls most likely would detect this error?

Check digit verification

Which of the following is true with respect to fraud risk factors in an IT environment?

Employees have increased access to information systems and computer resources in an IT environment

The client's computerized exception reporting system helps audit teams conduct a more efficient audit because it

Highlights abnormal conditions.

Select the proper order in performing Audit Data Analytics: I. Evaluate the results and conclude on whether the purpose and specific objectives of performing the ADA have been achieved II. Consider the relevance and reliability of the data used III. Plan the ADA IV. Perform the ADA V. Access and prepare the data for purposes of the ADA

III, V, II, IV, I

Which of the following persons is responsible for controlling access to systems documentation and access to program and data files?

Librarians

Certain characteristics of data may affect the relevance and reliability of the data used in the ADA. The level of aggregation is one of these characteristics. Which of the following does not illustrate differing levels of aggregation?

Number of annual transactions compared to the number of weekly transactions A consolidated statement compared to a single segment of a statement A total account balance compared to a single transaction within that balance Answer: All of the above illustrate differing levels of aggregation

In an environment that is highly automated, an auditor determines that it is not possible to reduce detection risk solely by using substantive tests of transactions. Under these circumstances, the auditor most likely would

Perform tests of controls to support a lower level of assessed control risk.

Which of the following is not a typical problem found by auditors when cleansing client data for the purposes of performing an ADA?

Some fields may not be sorted in numerical order and require sorting for identification of outliers.

In determining the reliability of the data to be used by the audit team, an auditor discovers the data is controlled internally by the accounting department. Which of the following is the most likely step the auditor would take after learning of this information?

The auditor should consider obtaining information from a more reliable source before continuing with the ADA.

Which of the following statements most likely represents a control consideration for an entity that performs its accounting using mobile computing devices?

Unauthorized persons find it easy to access the computer and alter the data files.

To determine the reliability of data, the auditor may consider all but which of the following?

Whether the auditor's system has been subject to reliability testing