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Auditing Chapter 12 Quiz

8 Questions
Finance Quizzes & Trivia

Auditing quiz derived from the 12th chapter of the textbook Auditing and Assurance Services an Intergrated Approach by Arens.

Questions and Answers
  • 1. 
    IT has several significant effects on an organization. Which of the following would not be important from an auditing perspective?
    • 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. 
    The audit procedure which is least useful in gathering evidence on significant computer processes is:
    • 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?
    • A. 

      Ability to process large volumes of transactions.

    • 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. 
    One significant risk related to an automated environment is that auditors may ____ information provided by an information system.
    • A. 

      Not place enough reliance on

    • B. 

      Place too much reliance on

    • C. 

      Reveal

    • D. 

      Not understand

  • 5. 
    Which of the following is not a risk specific to IT environments?
    • A. 

      Reliance on the functioning capabilities of hardware and software.

    • B. 

      Increased human involvement.

    • C. 

      Loss of data due to insufficient backup.

    • D. 

      Reduced segregation of duties.

  • 6. 
    Which of the following is not an enhancement to internal control that will occur as a consequence of increased reliance on IT?
    • 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?
    • A. 

      Need for IT experienced staff

    • B. 

      Separation of IT duties from accounting functions

    • C. 

      Improved audit trail

    • D. 

      Hardware and data vulnerability

  • 8. 
    Which of the following is not a category of an application control?
    • A. 

      Processing controls.

    • B. 

      Output controls.

    • C. 

      Hardware controls.

    • D. 

      Input controls.