Computer-Based Audit Trail and Documentation Techniques Quiz

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Questions and Answers

Which cycle involves the planning, scheduling, and control of the physical product through the manufacturing process?

Expenditure cycle

Conversion cycle (correct)

Revenue cycle

None of the above

Which type of journal records specific classes of transactions that occur in high frequency?

General journal

Ledger

Special journals (correct)

Subsidiary ledger

Which book of financial accounts shows activity for each account listed on the chart of accounts?

Special journals

Subsidiary ledger

Ledger

General ledger (correct)

What is the time lag between the two components of the revenue cycle due to?

Credit relations with customers Signup and view all the answers

What are the similar types of transactions grouped together into?

Transaction cycles Signup and view all the answers

Which subsystem of the expenditure cycle involves the acquisition of goods?

Physical component Signup and view all the answers

What is used to capture and formalize transaction data needed for transaction processing?

Source documents Signup and view all the answers

Which system records the flow of cost information related to production?

Cost accounting system Signup and view all the answers

Which type of document becomes a source document for another system in a manual system accounting records?

Turnaround documents Signup and view all the answers

What does the subsidiary ledger show activity by detail for?

Each account type Signup and view all the answers

Which documentation technique is widely used in AIS to represent the relationship between entities in a system?

Entity Relationship Diagrams (ERD) Signup and view all the answers

What is a critical step in the auditing process related to accounts receivable (AR)?

Reconciliation of the AR control figure with the AR subsidiary account total Signup and view all the answers

What type of files are used to store data in computer-based systems?

Master files, transaction files, reference files, and archive files Signup and view all the answers

What is the purpose of Document Flowcharts in a computer-based environment?

Illustrate the relationship among processes and the documents that flow between them Signup and view all the answers

What is a common technique used in tracing transactions in accounts receivable (AR) auditing?

Sampling and confirmation Signup and view all the answers

What is the primary purpose of selecting a sample of update entries made to accounts in the AR subsidiary ledger?

Tracing these entries to transactions in the sales journal Signup and view all the answers

In a computer-based system, what is the role of data entry and computer programs in the audit trail?

Forming the physical trail Signup and view all the answers

What is the purpose of selecting a sample of update entries made to accounts in the AR subsidiary ledger in the auditing process?

Tracing these entries to transactions in the sales journal Signup and view all the answers

What is the main difference between Document Flowcharts and Data Flow Diagrams (DFD) in representing system elements?

Document Flowcharts illustrate the relationship among processes and the documents that flow between them, containing more details than data flow diagrams Signup and view all the answers

What is the primary purpose of Entity Relationship Diagrams (ERD) in a computer-based system?

Represent the relationship between entities in a system Signup and view all the answers

What is the primary characteristic of early legacy systems in terms of data storage?

Flat files Signup and view all the answers

What is the main purpose of backup procedures in the context of updating master files?

Preserve adequate records Signup and view all the answers

What is the key advantage of batch processing in computer-based accounting systems?

Increases efficiency by grouping large numbers of transactions into batches Signup and view all the answers

What is the distinguishing characteristic between batch and real-time processing methods?

Time lag exists in batch processing but not in real-time processing Signup and view all the answers

Why do many AIS use batch processing?

High-volume, independent transactions can be processed during off-peak computer time Signup and view all the answers

What is the role of backup procedures in the context of destructive updates?

To create a pre-update version of the master file Signup and view all the answers

What is the key difference between early and later legacy systems in terms of data storage?

Early systems use flat files, while later systems use hierarchical and network databases Signup and view all the answers

What is the main characteristic of real-time systems in terms of processing transactions?

Process transactions individually at the moment the economic event occurs Signup and view all the answers

What is the primary reason for real-time systems requiring greater resources than batch processing?

They require dedicated processing capacity Signup and view all the answers

What is the main advantage of batch processing in terms of control over the transaction process?

Provides control over the transaction process via control figures Signup and view all the answers

What type of databases were used in early legacy systems?

Flat files Signup and view all the answers

What type of environment did data storage systems in legacy systems promote?

Single-user environment Signup and view all the answers

What is the main characteristic of batch processing?

A time lag exists between the event and the processing Signup and view all the answers

What is the purpose of the Backup Procedure in updating master files?

To preserve adequate records in case of destructive updates Signup and view all the answers

What is the distinguishing characteristic between batch and real-time processing?

A time lag exists between the event and the processing in batch processing Signup and view all the answers

Why do many AIS use batch processing?

AIS processing is characterized by high-volume, independent transactions Signup and view all the answers

What is the main reason for batch processing to be appropriate?

The transactions must be independent of one another during the time period over which the transactions are accumulated Signup and view all the answers

What is the advantage of batch processing?

Organizations can increase efficiency by grouping large numbers of transactions into batches Signup and view all the answers

What are the steps in Batch Processing/Sequential File?

Keystroke, Edit Run, Sort Run, Update Run Signup and view all the answers

What is the characteristic difference between batch and real-time processing?

Batch processing has a time lag between the event and the processing, while real-time processing does not Signup and view all the answers

Study Notes

Audit Trail and Documentation Techniques in Computer-Based Systems

A comparison between the AR balance in the balance sheet and the master file AR control account balance is necessary.
Reconciliation of the AR control figure with the AR subsidiary account total is a critical step in the auditing process.
It is important to select a sample of update entries made to accounts in the AR subsidiary ledger and trace these to transactions in the sales journal.
Identifying source documents from journal entries and confirming them by contacting customers is an essential part of the audit trail.
Accountants should be able to trace in both directions, and sampling and confirmation are common techniques used.
The audit trail is less observable in computer-based systems than traditional manual systems, with data entry and computer programs forming the physical trail.
Computer-based systems store data in magnetic files, which are categorized into master files, transaction files, reference files, and archive files.
Documentation in a computer-based environment is necessary for many reasons, and there are five common documentation techniques used.
Entity Relationship Diagrams (ERD) are used to represent the relationship between entities in a system, with the REA model version being widely used in AIS.
Data Flow Diagrams (DFD) use symbols to represent the processes, data sources, data flows, and entities in a system and represent the logical elements of the system.
Document Flowcharts illustrate the relationship among processes and the documents that flow between them, containing more details than data flow diagrams.
System Flowcharts represent the relationship between the key elements of computer systems and depict the type of media being used, such as paper, magnetic tape, and terminals.

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Description

Test your knowledge of audit trail and documentation techniques in computer-based systems with this quiz. Explore concepts such as AR balance reconciliation, tracing transactions, documentation techniques, and the differences between manual and computer-based systems.

Computer-Based Audit Trail and Documentation Techniques Quiz

Podcast Beta

Questions and Answers

Which cycle involves the planning, scheduling, and control of the physical product through the manufacturing process?

Which type of journal records specific classes of transactions that occur in high frequency?

Which book of financial accounts shows activity for each account listed on the chart of accounts?

What is the time lag between the two components of the revenue cycle due to?

What are the similar types of transactions grouped together into?

Which subsystem of the expenditure cycle involves the acquisition of goods?

What is used to capture and formalize transaction data needed for transaction processing?

Which system records the flow of cost information related to production?

Which type of document becomes a source document for another system in a manual system accounting records?

What does the subsidiary ledger show activity by detail for?

Which documentation technique is widely used in AIS to represent the relationship between entities in a system?

What is a critical step in the auditing process related to accounts receivable (AR)?

What type of files are used to store data in computer-based systems?

What is the purpose of Document Flowcharts in a computer-based environment?

What is a common technique used in tracing transactions in accounts receivable (AR) auditing?

What is the primary purpose of selecting a sample of update entries made to accounts in the AR subsidiary ledger?

In a computer-based system, what is the role of data entry and computer programs in the audit trail?

What is the purpose of selecting a sample of update entries made to accounts in the AR subsidiary ledger in the auditing process?

What is the main difference between Document Flowcharts and Data Flow Diagrams (DFD) in representing system elements?

What is the primary purpose of Entity Relationship Diagrams (ERD) in a computer-based system?

What is the primary characteristic of early legacy systems in terms of data storage?

What is the main purpose of backup procedures in the context of updating master files?

What is the key advantage of batch processing in computer-based accounting systems?

What is the distinguishing characteristic between batch and real-time processing methods?

Why do many AIS use batch processing?

What is the role of backup procedures in the context of destructive updates?

What is the key difference between early and later legacy systems in terms of data storage?

What is the main characteristic of real-time systems in terms of processing transactions?

What is the primary reason for real-time systems requiring greater resources than batch processing?

What is the main advantage of batch processing in terms of control over the transaction process?

What type of databases were used in early legacy systems?

What type of environment did data storage systems in legacy systems promote?

What is the main characteristic of batch processing?

What is the purpose of the Backup Procedure in updating master files?

What is the distinguishing characteristic between batch and real-time processing?

Why do many AIS use batch processing?

What is the main reason for batch processing to be appropriate?

What is the advantage of batch processing?

What are the steps in Batch Processing/Sequential File?

What is the characteristic difference between batch and real-time processing?

Study Notes

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