10 Questions
Which of the following is a characteristic that distinguishes computer processing from manual processing?
Most computer systems are designed so that transaction trails useful for audit do not exist.
Which of the following is not one of the recent changes needing to be addressed in discharging businesses’ responsibilities in a CIS environment?
The need for data communication and networking is decreasing.
Which of the following is not one of the impacts of CIS in the accountancy profession?
Processing of transactions is not consistent
What is a disadvantage of auditing around the computer?
Interacts actively with auditee applications
What distinguishes computer processing regarding computational errors?
Virtually eliminates computational errors normally associated with manual processing
Which of the following relates to the materiality of the financial statement assertions affected by computer processing?
Significance
When auditing an EDP system by testing input and output instead of the computer program itself, what is not detected?
Program errors which do not show up in the output sampled
Which audit technique would most likely provide an auditor with the most assurance about the effectiveness of the operation of an internal control procedure?
Confirmation with outside parties
What should the auditor obtain to plan the audit and determine the nature, timing, and extent of the audit procedures, excluding which of the following?
The computer information systems infrastructure (hardware, operating system(s) and application software used by the entity)
Which of the following consists of generalized computer programs designed to perform common audit tasks or standardized data processing functions?
Packaged or generalized audit software
Study Notes
Computer Processing vs. Manual Processing
- Speed and accuracy are characteristics that distinguish computer processing from manual processing.
Changes in Discharging Businesses' Responsibilities
- The need for independence and objectivity in a CIS environment is not a recent change.
Impacts of CIS on Accountancy Profession
- CIS does not eliminate the need for accountants.
Disadvantages of Auditing Around the Computer
- Auditing around the computer can miss material errors in input data and processing.
Computational Errors in Computer Processing
- Errors in computer processing may be undetected due to the speed and complexity of processing.
Materiality of Financial Statement Assertions
- The materiality of financial statement assertions affected by computer processing is related to the magnitude of the errors.
Limitations of Testing Input and Output
- Testing input and output may not detect errors in the computer program itself.
Audit Techniques for Internal Control Procedures
- Reperforming the internal control procedures provides the most assurance about their effectiveness.
Planning the Audit
- The auditor should obtain a general understanding of the entity and its environment to plan the audit, excluding the audit program.
Generalized Computer Programs
- Generalized audit software consists of standardized computer programs designed to perform common audit tasks or standardized data processing functions.
Test your knowledge about the characteristics that distinguish computer processing from manual processing. Choose the correct option from the given choices related to computational errors, error detection, and systematic errors.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
