Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 12, Problem 15RQ
To determine
Identify the meaning of test data approach and the difficulties associated with using this approach and the meaning of parallel simulation with audit software and an example illustrating how it can used to test a client’s payroll system.
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Students have asked these similar questions
1.Explain the relation ship between application controls and transaction related audit objectives .
2.explain what is meant by auditing around the computer and describe what must be present for this approach to be effective when auditing clients who use IT to process accounting information
3.explain what meant by the test data approach. What are the major difficulties with using this approach?define parallel simulation with audit software and provide an exmaple of how it can be used to test a client's payroll system
4.describe risks that are associated with purchasing software to be installed on desktop computer hard drives.what precautions can clients take to reduce those risks?
5.compare the risks associated with network systems to those associated with centralized IT functions
6.how does the use of a database management system affect risks?
7.an audit client is in the process of creating an online web-based sales ordering system for customers to purchase products using personal…
When an auditor tests the internal controls of a computerized accounting system, which of the following is true of the test data approach?
A. Test data are coded to a dummy subsidiary so they can be extracted from the system under actual operating conditions.
B. Test data programs need NOT be tailor-made by the auditor for each client's computer applications.
C. Test data programs usually consist of all possible valid and invalid conditions reguarding compliance with internal controls.
D. Test data are processed with the client's computer and the results are compared with the auditor's predetermined results.
What are the possible scenarios in the delivery creation process? Can a SAP user create a delivery without referencing any existing order?
Write a few audit techniques applied to audit computerized AIS?
Chapter 12 Solutions
Auditing And Assurance Services
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Describe how the nature of evidence used to...Ch. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - Prob. 16.1MCQCh. 12 - Prob. 16.2MCQCh. 12 - Prob. 16.3MCQCh. 12 - Prob. 17.1MCQCh. 12 - Prob. 17.2MCQCh. 12 - Prob. 17.3MCQCh. 12 - Prob. 18.1MCQCh. 12 - Prob. 18.2MCQCh. 12 - Prob. 18.3MCQCh. 12 - Prob. 19.1MCQCh. 12 - Prob. 19.2MCQCh. 12 - Prob. 19.3MCQCh. 12 - Prob. 20DQPCh. 12 - Prob. 21DQPCh. 12 - Prob. 22DQPCh. 12 - Prob. 23DQPCh. 12 - Prob. 24DQPCh. 12 - Prob. 25DQPCh. 12 - Prob. 26DQPCh. 12 - Prob. 27DQPCh. 12 - A CPAs client, Boos Baumkirchner, Inc., is a...Ch. 12 - Prob. 29DQPCh. 12 - Prob. 30DQPCh. 12 - Based on a cost-benefit analysis, management at...Ch. 12 - Prob. 32DQPCh. 12 - Prob. 33DQPCh. 12 - Prob. 34DQP
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Similar questions
- Which of the following statements is most accurate? a. ERP systems are commercial software packages that are sometimes called turnkey systems because they can be implemented by the user with little or no modification. b. Substantive tests provide evidence focused on the system controls. c. Public accounting firms that provide attest services are not allowed under SOX to offer IT advisory services. d. Both small and large firms that have standardized information needs are potential customers for commercial software. e. External auditors may rely on the work of internal auditors only if they report to the controller or the CEO of the client company.arrow_forwardDescribe the differences between auditing around the computer and auditing through the computer? Which one is more effective in a computerized accounting information system? Why?arrow_forward( data backups) explain how can they implemented and how they make accountant job more efficient?arrow_forward
- Explain how client internal controls can be improved through the proper installation of IT. Identify risks for accounting systems that rely heavily on IT functions. Define what is meant by an audit trail and explain how it can be affected by the client’s integration of IT. Distinguish between random error resulting from manual processing and systematic error resulting from IT processing and give an example of each category of error. Identify the traditionally segregated duties in noncomplex IT systems and explain how increases in the complexity of the IT function affect that separation. Distinguish between general controls and application controls and give two examples of each. Identify the typical duties within an IT function and describe how those duties should be segregated among IT personnel. Explain how the effectiveness of general controls affects the auditor’s tests of automated application controls, including the auditor’s ability to rely on tests done in prior auditsarrow_forwardHow can Embedded Audit Modules in software be utilized in an audit?arrow_forwardIn auditing program change control, the IT auditor will: a. Not need to inspect program authorization forms for signatures b. Ensure an organization is following the process described in their documentation for program change control c. Make sure that only computer programmers move their own changes into a production environment d. Make sure that only computer programmers have tested the changes they made to programsarrow_forward
- Which of the following is an example of an input control? a.making sure report that are distributed to the proper people b.monitoring the work of data entry clerks. c. Collecting accurate statistics of historical transactions while gathering data. d. Performing a check-digit test on a customer acount number e.Having anothr person review the design of a business formarrow_forwardCPAs may audit around or through computers in the audit of the financial statements of clients who use IT to process accounting data. d. How can the CPAs be satisfied that the computer programs presented to them for testing are actually those used by the client for processing accounting data?arrow_forwardQuestions Explain how client internal controls can be improved through the proper installation of IT. Identify risks for accounting systems that rely heavily on IT functions. Define what is meant by an audit trail and explain how it can be affected by the client’s integration of IT. Distinguish between random error resulting from manual processing and systematic error resulting from IT processing and give an example of each category of error. Identify the traditionally segregated duties in noncomplex IT systems and explain how increases in the complexity of the IT function affect that separation. Distinguish between general controls and application controls and give two examples of each. Identify the typical duties within an IT function and describe how those duties should be segregated among IT personnel. Explain how the effectiveness of general controls affects the auditor’s tests of automated application controls, including the auditor’s ability to rely on tests done in prior…arrow_forward
- An audit client has engaged a third-party service organization tohost its payroll software package on servers located at the service organization. What optionsdo you have to obtain assurance about the controls embedded in the payroll application?arrow_forwardIf a client relies on information technology (IT) controls and the auditor plans to assess control risk as low for payroll assertions, the auditor will usually do all of the following, EXCEPT _______. --test the effectiveness of manual controls --use computer-assisted audit techniques (CAATs) to evaluate the effectiveness of IT application controls --test the effectiveness of manual procedures to follow up on exceptions --All of the answer choices are correct.arrow_forwardhas hired you to review its sales order procedures for internal control compliance and to make recommendations for changes. You are required to:a. Create a data flow diagram of the current system. b. Create a system flowchart of the existing system. c. Analyze the internal control weaknesses in the system. ; andd. Prepare a system flowchart of a redesigned computer-based systemarrow_forward
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