Exam 3

Which of the following are options the auditor may take if the objectives of the ADA test were not achieved?

1. Abandon ADA and perform different procedures 2. Consider a different ADA (BOTH)

After evaluating the results of an ADA, which notable items should the auditor perform additional procedures on?

Missing items - Yes Duplicate items -Yes Items with elevated risk - Yes

Which aspects of data ARE important for data used in ADA

-Relevance -Completeness -Reliability

Which of the following are benefits that distributed ledger technology (DLT) can provide to auditors in the future

-Automated audit procedures -Improved Audit Trails -Permanent Record-Keeping

Which of the following best describes what audit data analytics are?

-Identifying anomalies in data -Discovering and analyzing patterns in data -Extracting useful information in data

When accessing and preparing data to be analyzed using an ADA it is important to:

Cleanse the data

The effectiveness of general controls is an important consideration for audit teams when assessing control risk of an audit. Which management assertions are primarily affected by the general controls?

Accuracy and Occurrence

Documentation of an ADA, should be sufficient enough such that

An experienced auditor, with no prior connection to the engagement could understand the conclusions reached and significant judgments made

Which of the following is not a difference that is introduced when an entity uses the computer in processing its transactions?

Audit teams are not required to obtain an overall understanding of the entity's internal control in a computerized processing environment

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

Auditors may include client data in audit documentation

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

Batch totals

Which of the following statements best describes the impact on an audit when a client uses computerized processing of transactions?

The effectiveness of computer controls implemented by the client over its computerized processing may need ot be evaluated by audit teams

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 categories of general controls includes retention and recovery techniques for data and related programs ?

Computer operations

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

Computer operations have access to operator instructions and detailed program lists

Which of the following is a correct statement with regard to job responsibilities of individuals in an automated information processing environment?

Computer operators oversee the operation of the computer for each accounting application system

Which of the following is not an example of a general control

The organization's use of check digits to ensure accurate input of transaction data

Data from which of the following sources is most likely to be unreliable?

Data obtained directly from the client with weak internal controls

Which of the following would not be considered when planning an ADA

Determine the sample of the population to be analyzed

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

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

External labels

Which fo the following is an example of a computer operations control?

File backup and retention

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

Highlights abnormal conditions

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

Audit Data analytics (ADA) allow the auditor to test/analyze 100% of the data rather than a sample. What is the benefit of being able to test the entire population of data?

Increased Assurance - Yes Increased Reliability - Yes

Which of the following is true of audit data analytics?

It is used to gain insights and improve audit quality

Which of the following is not a control included as part of the systems development life cycle?

Requiring that all programming efforts take place under the control of the requesting user department

Which of the following organizational positions would evaluate the existing system and design new computerized processing systems and documentation?

Systems analyst

Which of the following is a general control that would most likely assist an organization whose systems analyst resigned during the development of a major project?

Systems documentation

When audit teams test a computerized processing system, which of the following is true of the test data approach?

Test data are processed by the client's computer programs under the audit team's control

Which of the following is not true with respect to the test data approach for evaluating computer controls?

The test data are created for a separate entity and are run simultaneously with the client's actual data

Why is it important that the organization establish systems development and documentation standards?

These standards ensure that the program controls and documentation included in recently-developed programs is adequate

Input controls provide reasonable assurance that all of the following objectives are achieved, except:

Transactions have been entered in batches

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

When performing an aDA, an auditor must exercise professional skepticism in all fo the following situations except:

When documenting rationale for their professional judgement used during the ADA

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

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

The first step of planning an aDA is

determine the overall purpose and specific objectives of the ADA

When documenting an 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 data

As part of assessing the risk of material misstatement, the audit team must assess the control riks in the computerized processing system. Initially, the audit team must identify the overall processing scope of the system(s), which would include each of the following considerations except

the specific control procedures that have been implemented by the client to prevent or detect misstatements that could occur based on the audit team's analysis