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Assignments - 12-17(Objectives 12-1 12-4 The following...

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12-17 (Objectives 12-1, 12-4) The following questions concern the characteristics of IT systems. Choose the best response. a. An IT system is designed to ensure that management possesses the information it needs to carry out its functions through the integrated actions of (1) data-gathering, analysis, and reporting functions. (2) a computer-based information retrieval and decision-making system. (3) statistical and analytical procedures functions. (4) production budgeting and sales forecasting activities. b. Which of the following conditions will not normally cause the auditor to question whether material misstatements exist? (1) Bookkeeping errors are listed on an IT-generated error listing. (2) Differences exist between control accounts and supporting master files. (3) Transactions are not supported by proper documentation. (4) Differences are disclosed by confirmations. c. As general IT controls weaken, the auditor is most likely to (1) reduce testing of automated application controls done by the computer. (2) increase testing of general IT controls to conclude whether they are operating effectively. (3) expand testing of automated application controls used to reduce control risk to cover greater portions of the fiscal year under audit. (4) ignore obtaining knowledge about the design of general IT controls and whether they have been implemented. d. Which of the following is an example of an application control? (1) The client uses access security software to limit access to each of the accounting applications. (2) Employees are assigned a user ID and password that must be changed every quarter. (3) The sales system automatically computes the total sale amount and posts the total to the sales journal master file.
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