EBK PRINCIPLES OF AUDITING & OTHER ASSU
21st Edition
ISBN: 9781260299434
Author: WHITTINGTON
Publisher: YUZU
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Chapter 8, Problem 29JOQ
To determine
Identify the appropriate answer related to the advantages of generalized audit software packages.
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Which of the following is an advantage of computer-assisted audit techniques (CAATs)?a. All the CAATs programs are written in one computer language.b. The software can be used for audits of clients that use differing computer equipment and file formats.c. The use of CAATs has reduced the need for the auditor to study input controls for computer-related procedures.d. The use of CAATs can be substituted for a relatively large part of the required testing.
Which 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 software
When using test data, why are audit teams required to prepare only one transaction to test each IT control?a. The speed and efficiency of the computer results in reduced sample sizes.b. The risk of misstatement is typically lower in an IT environment.c. Audit teams generally perform more extensive substantive testing in an IT environment, resulting in less need to test processing controls.d. In an IT environment, each transaction is handled in an identical manner.
Chapter 8 Solutions
EBK PRINCIPLES OF AUDITING & OTHER ASSU
Ch. 8 - List and describe the major components of an...Ch. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Distinguish general control activities from...Ch. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - What is the difference between an Internet-based...Ch. 8 - Prob. 15RQCh. 8 - Prob. 16RQCh. 8 - Prob. 17RQCh. 8 - Prob. 18RQCh. 8 - Prob. 19RQCh. 8 - Prob. 20RQCh. 8 - Prob. 21RQCh. 8 - Prob. 22QRACh. 8 - Prob. 23QRACh. 8 - Prob. 24QRACh. 8 - Prob. 25QRACh. 8 - Prob. 26QRACh. 8 - Prob. 27QRACh. 8 - Prob. 28QRACh. 8 - Prob. 29AOQCh. 8 - Prob. 29BOQCh. 8 - Prob. 29COQCh. 8 - Prob. 29DOQCh. 8 - When an online real-time (OLRT) IT processing...Ch. 8 - Prob. 29FOQCh. 8 - Prob. 29GOQCh. 8 - Prob. 29HOQCh. 8 - Prob. 29IOQCh. 8 - Prob. 29JOQCh. 8 - Prob. 29KOQCh. 8 - Prob. 29LOQCh. 8 - Prob. 30OQCh. 8 - Prob. 31OQCh. 8 - For each definition (or partial definition) in the...Ch. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38ITC
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- A primary advantage of using generalized audit software packages to audit the financial statements of a client that uses a computer system is that the auditor may: a.Access information stored on computer files while having a limited understanding of the client’s hardware and software features. b.Consider increasing the use of substantive tests of transactions in place of analytical procedures. c.Substantiate the accuracy of data through selfchecking digits and hash totals. d.Reduce the level of required tests of controls to a relatively small amount.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_forwardWhich of the following statements is most accurate? a. ERP systems are commercial software packages that are sometimes called turnkey systems because they can be implemented by the user with little or no modification. b. Substantive tests provide evidence focused on the system controls. c. Public accounting firms that provide attest services are not allowed under SOX to offer IT advisory services. d. Both small and large firms that have standardized information needs are potential customers for commercial software. e. External auditors may rely on the work of internal auditors only if they report to the controller or the CEO of the client company.arrow_forward
- Consider “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_forwardWhich of the following is a disadvantage of distributed data processing? a. End-user involvement in systems operation is decreased. b. Disruptions due to mainframe failures are increased. c. The potential for hardware and software incompatibility across the organization isincreased. d. The time between project request and completion is increased. e. All of the above are disadvantages.arrow_forwardManagement and auditor are concerned about segregation of duties in computer based systems? Why? How to mitigate this concern?arrow_forward
- If the system is behind schedule and if each program module is tested and no problems are found, is it necessary to test all modules in conjunction with one another? Why or why not?arrow_forwardAn IT auditor is performing an application development audit for a high risk web-based application. In determining tests of controls, which of the following is a TRUE statement: 1. The IT auditor should limit testing to inquiry procedures with the lead developer. 2. Conduct inquiry procedures, corroborated by inspection of evidence. 3. Increase sample sizes due to the elevated risks associated with the application. a) 1, 2, and 3 b) 1 and 2 only c) 1 only d) 2 and 3 onlyarrow_forwardState whether each of the following statements is correct or incorrect. Specialists with specialized skills in IT processing are seldom used on audits since each audit team A. member is expected to have the necessary skills. The nature of the IT-based system may affect the specific procedures employed by the auditors in В. testing the controls. Computer assisted audit techniques, while helpful for tests of controls, are seldom helpful for С. substantive procedures. D. IDEA and ACL are examples of computer assisted audit techniques. Next > ... < Prev 1 of 3arrow_forward
- 5. Which of the following is not a risk in a computerized information system (CIS) a. need for CIS experienced staff b. separation of CIS duties from accounting functions c. improved audit trail d. hardware and data vulnerability Required: choose the correct answer and Justify your answers in at least 6 sentences.arrow_forwardA primary advantage of using CAATs in the audit of an advanced computerized system is that it enables the auditor toa. Substantiate the accuracy of data through self-checking digits and hash totals.b. Utilize the speed and accuracy of the computer.c. Verify the performance of machine operations that leave visible evidence of the occurrence.d. Gather and store large amounts of supportive audit evidence in machine-readable form.arrow_forwardWhich of the following statements about the client-server model is correct?a. It is best suited to the token ring topology because the random-access method this topology uses detects data collisions.b. It distributes both data and processing tasks to the server node. The client-server model can use the bus or ring topology.c. It is most effective when used as a bus topology because its deterministic access method avoids collisions and prevents data loss during transmissions.d. It is more efficient than the bus or ring topologies because it transmits an entire file of records to the requesting node rather than only a single record.e. It is not used in conjunction with either the bus or ring topologies.arrow_forward
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