EBK AUDITING+ASSURANCE SERVICES
17th Edition
ISBN: 9780135171219
Author: ARENS
Publisher: PEARSON CO
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Chapter 12, Problem 15RQ
To determine
Identify the meaning of test data approach and the difficulties associated with using this approach and the meaning of parallel simulation with audit software and an example illustrating how it can used to test a client’s payroll system.
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1.Explain the relation ship between application controls and transaction related audit objectives .
2.explain what is meant by auditing around the computer and describe what must be present for this approach to be effective when auditing clients who use IT to process accounting information
3.explain what meant by the test data approach. What are the major difficulties with using this approach?define parallel simulation with audit software and provide an exmaple of how it can be used to test a client's payroll system
4.describe risks that are associated with purchasing software to be installed on desktop computer hard drives.what precautions can clients take to reduce those risks?
5.compare the risks associated with network systems to those associated with centralized IT functions
6.how does the use of a database management system affect risks?
7.an audit client is in the process of creating an online web-based sales ordering system for customers to purchase products using personal…
How can Embedded Audit Modules in software be utilized in an audit?
Why might an auditor use a program flowchart?
Chapter 12 Solutions
EBK AUDITING+ASSURANCE SERVICES
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Describe how the nature of evidence used to...Ch. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - Prob. 16.1MCQCh. 12 - Prob. 16.2MCQCh. 12 - Prob. 16.3MCQCh. 12 - Prob. 17.1MCQCh. 12 - Prob. 17.2MCQCh. 12 - Prob. 17.3MCQCh. 12 - Prob. 18.1MCQCh. 12 - Prob. 18.2MCQCh. 12 - Prob. 18.3MCQCh. 12 - Prob. 19.1MCQCh. 12 - Prob. 19.2MCQCh. 12 - Prob. 19.3MCQCh. 12 - Prob. 20DQPCh. 12 - Prob. 21DQPCh. 12 - Prob. 22DQPCh. 12 - Prob. 23DQPCh. 12 - Prob. 24DQPCh. 12 - Prob. 25DQPCh. 12 - Prob. 26DQPCh. 12 - Prob. 27DQPCh. 12 - A CPAs client, Boos Baumkirchner, Inc., is a...Ch. 12 - Prob. 29DQPCh. 12 - Prob. 30DQPCh. 12 - Based on a cost-benefit analysis, management at...Ch. 12 - Prob. 32DQPCh. 12 - Prob. 33DQPCh. 12 - Prob. 34DQP
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- What are the possible scenarios in the delivery creation process? Can a SAP user create a delivery without referencing any existing order? Write a few audit techniques applied to audit computerized AIS?arrow_forwardDiscuss the importance of the role of data administrator. In the flat-fie environment, why is such a rolenot necessary? What tasks does the DBA perform?arrow_forwardSelect one method an auditor can use to audit through the computer system. Explain how the method works, any risks associated with the method, and how you would justify using the method from a cost-benefit perspective.arrow_forward
- Briefly provide your opinion whether an auditor wishing to assess the adequacy of separation of functions examine a data flow diagram or system flowchart. Why.arrow_forwardWhich of the following is NOT an audit technique for auditing computerized AIS? a. Continuous auditing b. All of the above are techniques used to audit computerized AIS c. parallel simulation d. Use of specialized control softwarearrow_forwardExplain the purposes and benefits of audit documentation software.arrow_forward
- Exactly what is the advantage of using Generalized Audit Software during an audit?arrow_forwardWhen an auditor tests the internal controls of a computerized accounting system, which of the following is true of the test data approach? A. Test data are coded to a dummy subsidiary so they can be extracted from the system under actual operating conditions. B. Test data programs need NOT be tailor-made by the auditor for each client's computer applications. C. Test data programs usually consist of all possible valid and invalid conditions reguarding compliance with internal controls. D. Test data are processed with the client's computer and the results are compared with the auditor's predetermined results.arrow_forwardDescribe the differences between auditing around the computer and auditing through the computer? Which one is more effective in a computerized accounting information system? Why?arrow_forward
- How is Parallel Simulation utilized during an audit?arrow_forwardQuestions Explain how client internal controls can be improved through the proper installation of IT. Identify risks for accounting systems that rely heavily on IT functions. Define what is meant by an audit trail and explain how it can be affected by the client’s integration of IT. Distinguish between random error resulting from manual processing and systematic error resulting from IT processing and give an example of each category of error. Identify the traditionally segregated duties in noncomplex IT systems and explain how increases in the complexity of the IT function affect that separation. Distinguish between general controls and application controls and give two examples of each. Identify the typical duties within an IT function and describe how those duties should be segregated among IT personnel. Explain how the effectiveness of general controls affects the auditor’s tests of automated application controls, including the auditor’s ability to rely on tests done in prior…arrow_forwardConsider “control environment.” Why it is important for auditors to understand a client’s control environment. What are some limitations of internal controls? Now consider “segregation of duties.” Determine why it is important in an IT environment. What are some advantages of using IT and audit software when conducting an audit?arrow_forward
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