Chapter12 - final - CHAPTER 12 Multiple-Choice Questions 1....

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CHAPTER 12 Multiple-Choice Questions 1. easy IT has several significant effects on an organization. Which of the following would not be important from an auditing perspective? d a. Organizational changes. b. The visibility of information. c. The potential for material misstatement. d. None of the above; i.e., they are all important. 2. easy The audit procedure which is least useful in gathering evidence on significant computer processes is: b a. documentation. b. observation. c. test decks. d. generalized audit software. 3. Which of the following is not a benefit of using IT-based controls? easy a. Ability to process large volumes of transactions. d b. Ability to replace manual controls with computer-based controls. c. Reduction in misstatements due to consistent processing of transactions. d. Over-reliance on computer-generated reports. 4. easy One significant risk related to an automated environment is that auditors may ____ information provided by an information system. b a. under-rely on b. over-rely on c. rely to little on d. over test 5. Which of the following is not a risk specific to IT environments? easy a. Reliance on the functioning capabilities of hardware and software. b b. Increased human involvement. c. Loss of data due to insufficient backup. d. Reduced segregation of duties. 6. easy Which of the following is not an enhancement to internal control that will occur as a consequence of increased reliance on IT? d a. Computer controls replace manual controls. b. Higher quality information is available. c. Computer-based controls provide opportunities to enhance separation of duties. d. Manual controls replace automated controls. 7. Which of the following is not a risk to IT systems? easy a. Need for IT experience c b. Separation of IT duties c. Improved audit trail d. Hardware and data vulnerability 12-1
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8. Which of the following is not a category of an application control? easy a. Processing controls. c b. Output controls. c. Hardware controls. d. Input controls. 9. Old and new systems operating simultaneously in all locations is a test approach known as: easy a. pilot testing. d b. horizontal testing. c. integrative testing. d. parallel testing. 10. easy a When the client uses a computer but the auditor chooses to use only the non-IT segment of internal control to assess control risk, it is referred to as auditing around the computer. Which one of the following conditions need not be present to audit around the computer? a. Computer programs must be available in English. b. The source documents must be available in a non-machine language. c. The documents must be filed in a manner that makes it possible to locate them. d. The output must be listed in sufficient detail to enable the auditor to trace individual transactions. 11.
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Chapter12 - final - CHAPTER 12 Multiple-Choice Questions 1....

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