Accounting Information Systems

10th Edition
Hall + 1 other
Publisher: Cengage Learning,
ISBN: 9781337619202



Accounting Information Systems

10th Edition
Hall + 1 other
Publisher: Cengage Learning,
ISBN: 9781337619202
Chapter 14, Problem 5RQ
Textbook Problem

What is the relationship between tests of controls and substantive tests?

To determine

Explain the relationship between tests of controls and substantive testing.

Explanation of Solution

Audit Planning:

Audit planning is the first step in the auditing process. Auditor gathers all the information about the company such as company’s objective, policies and procedures during this phase. Auditor also reviews the general control and application control and designs the plan for tests of controls and substantive control.

Test of controls and substantive testing are the second and third phase in audit process respectively. Tests of controls are controlling efforts where an auditor assesses the adequacy of company’s internal control...

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Chapter 14 Solutions

Accounting Information Systems
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Ch. 14 - What are the three primary IT functions that must...Ch. 14 - What exposures does data consolidation in an IT...Ch. 14 - Differentiate between general and application...Ch. 14 - What are the primary reasons for separating...Ch. 14 - What problems may occur as a result of combining...Ch. 14 - Why is poor-quality systems documentation a...Ch. 14 - What is the role of a corporate computer services...Ch. 14 - What are the five control implications of...Ch. 14 - List the control features that directly contribute...Ch. 14 - What is fault tolerance?Ch. 14 - What is RAID?Ch. 14 - What is the purpose of an audit?Ch. 14 - Discuss the concept of independence within the...Ch. 14 - What is the meaning of the term attest service?Ch. 14 - What are assurance services?Ch. 14 - What are the conceptual phases of an audit? How do...Ch. 14 - Distinguish between internal and external...Ch. 14 - What are the four primary elements described in...Ch. 14 - Explain the concept of materiality.Ch. 14 - What tasks do auditors perform during audit...Ch. 14 - Distinguish between tests of controls and...Ch. 14 - What is audit risk?Ch. 14 - Distinguish between errors and irregularities....Ch. 14 - Distinguish between inherent risk and control...Ch. 14 - What is the relationship between tests of controls...Ch. 14 - List the four general control areas.Ch. 14 - What types of documents would an auditor review in...Ch. 14 - What are some tests of physical security controls?Ch. 14 - What are the often-cited benefits of IT...Ch. 14 - Define commodity IT asset.Ch. 14 - Define specific asset.Ch. 14 - List five risks associated with IT outsourcing.Ch. 14 - Discuss the key features of Section 302 of SOX.Ch. 14 - Discuss the key features of Section 404 of SOX.Ch. 14 - Section 404 requires management to make a...Ch. 14 - Explain how general controls impact transaction...Ch. 14 - Prior to SOX, external auditors were required to...Ch. 14 - Does a qualified opinion on internal controls over...Ch. 14 - The PCAOB Standard No. 5 specifically requires...Ch. 14 - What fraud detection responsibilities (if any)...Ch. 14 - Explain at least three forms of computer fraud.Ch. 14 - A bank in California has 13 branches spread...Ch. 14 - Compare and contrast the following disaster...Ch. 14 - Who should determine and prioritize the critical...Ch. 14 - Discuss the differences between the attest...Ch. 14 - Define the management assertions of existence or...Ch. 14 - An organizations internal audit department is...Ch. 14 - Discuss why any distinction between IT auditing...Ch. 14 - Discuss how the process of obtaining audit...Ch. 14 - Some internal controls can be tested objectively....Ch. 14 - Give a specific example, other than the one in the...Ch. 14 - Discuss the subjective nature of auditing computer...Ch. 14 - Explain the outsourcing risk of failure to...Ch. 14 - Explain vendor exploitation.Ch. 14 - Explain why reduced security is an outsourcing...Ch. 14 - Explain how IT outsourcing can lead to loss of...Ch. 14 - Explain the role of Statement on Standards for...Ch. 14 - How do SSAE 16 Type 1 and Type 2 differ?Ch. 14 - How are the carve-out and inclusive methods of...Ch. 14 - Which of the following is NOT a task performed in...Ch. 14 - Which of the following is the best example of an...Ch. 14 - Which of the following statements is true? a. Both...Ch. 14 - Which of the following is NOT a control concern in...Ch. 14 - Which of the following disaster recovery...Ch. 14 - Which of the following is NOT a potential threat...Ch. 14 - Which of the following is NOT requirement of...Ch. 14 - Which of the following is NOT a requirement in...Ch. 14 - Which of the following is associated with the...Ch. 14 - Which of the following is not true about the SSAE...Ch. 14 - PHASES OF AN AUDIT: COMPENSATING GENERAL CONTROLS...Ch. 14 - DATA CENTER SECURITY The auditors of a financial...Ch. 14 - DISTRIBUTED PROCESSING SYSTEM The internal audit...Ch. 14 - DISASTER RECOVERY PLANNING CONTROVERSY The...Ch. 14 - SEPARATION OF DUTIES Transferring people from job...Ch. 14 - DISASTER RECOVERY SERVICE PROVIDERS Explain the...Ch. 14 - DISASTER RECOVERY PLAN Hexagon is an online...Ch. 14 - INTERNAL CONTROL AND DISTRIBUTED SYSTEMS The ABC...Ch. 14 - INTERNAL CONTROL RESPONSIBILITY FOR OUTSOURCED IT...Ch. 14 - COMPETING SCHOOLS OF THOUGHT REGARDING OUTSOURCING...Ch. 14 - DISTRIBUTED DATA PROCESSING Explain why an...Ch. 14 - Last year Johnson Industrials entered into a...Ch. 14 - Evergreen Corp has recently hired a CIO with...

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