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?

    <p>Credit relations with customers</p> Signup and view all the answers

    What are the similar types of transactions grouped together into?

    <p>Transaction cycles</p> Signup and view all the answers

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

    <p>Physical component</p> Signup and view all the answers

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

    <p>Source documents</p> Signup and view all the answers

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

    <p>Cost accounting system</p> Signup and view all the answers

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

    <p>Turnaround documents</p> Signup and view all the answers

    What does the subsidiary ledger show activity by detail for?

    <p>Each account type</p> Signup and view all the answers

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

    <p>Entity Relationship Diagrams (ERD)</p> Signup and view all the answers

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

    <p>Reconciliation of the AR control figure with the AR subsidiary account total</p> Signup and view all the answers

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

    <p>Master files, transaction files, reference files, and archive files</p> Signup and view all the answers

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

    <p>Illustrate the relationship among processes and the documents that flow between them</p> Signup and view all the answers

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

    <p>Sampling and confirmation</p> 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?

    <p>Tracing these entries to transactions in the sales journal</p> 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?

    <p>Forming the physical trail</p> 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?

    <p>Tracing these entries to transactions in the sales journal</p> Signup and view all the answers

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

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

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

    <p>Represent the relationship between entities in a system</p> Signup and view all the answers

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

    <p>Flat files</p> Signup and view all the answers

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

    <p>Preserve adequate records</p> Signup and view all the answers

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

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

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

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

    Why do many AIS use batch processing?

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

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

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

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

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

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

    <p>Process transactions individually at the moment the economic event occurs</p> Signup and view all the answers

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

    <p>They require dedicated processing capacity</p> Signup and view all the answers

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

    <p>Provides control over the transaction process via control figures</p> Signup and view all the answers

    What type of databases were used in early legacy systems?

    <p>Flat files</p> Signup and view all the answers

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

    <p>Single-user environment</p> Signup and view all the answers

    What is the main characteristic of batch processing?

    <p>A time lag exists between the event and the processing</p> Signup and view all the answers

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

    <p>To preserve adequate records in case of destructive updates</p> Signup and view all the answers

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

    <p>A time lag exists between the event and the processing in batch processing</p> Signup and view all the answers

    Why do many AIS use batch processing?

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

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

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

    What is the advantage of batch processing?

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

    What are the steps in Batch Processing/Sequential File?

    <p>Keystroke, Edit Run, Sort Run, Update Run</p> Signup and view all the answers

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

    <p>Batch processing has a time lag between the event and the processing, while real-time processing does not</p> 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.

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