Te
1
ch
TEST BANK Information Technology
Gu
Auditing 4th Edition by James Hall
ru
ALL CHAPTER 1-12 WITH ACCURATE ANSWERS
, Te
2
ch
Chapter 1—Auditing and Internal Control
Gu
TRUE/FALSE
1. Corporate management (including the CEO) must certify monthly and annually their
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organization’s internal controls over financial reporting.
ANSWER: F PTS: 1
2. Both the SEC and the PCAOB require management to use the COBIT framework for assessing
internal control adequacy.
ANSWER: F PTS: 1
3. Both the SEC and the PCAOB require management to use the COSO framework for assessing
internal control adequacy.
ANSWER: F PTS: 1
4. A qualified opinion on management’s assessment of internal controls over the financial reporting
system necessitates a qualified opinion on the financial statements?
ANSWER: F PTS: 1
5. The same internal control objectives apply to manual and computer-based information systems.
ANSWER: T PTS: 1
6. The external auditor is responsible for establishing and maintaining the internal control system.
ANSWER: F PTS: 1
7. Segregation of duties is an example of an internal control procedure.
ANSWER: T PTS: 1
8. Preventive controls are passive techniques designed to reduce fraud.
ANSWER: T PTS: 1
, Te
3
ch
9. The Sarbanes-Oxley Act requires only that a firm keep good records.
Gu
ANSWER: F PTS: 1
ru
10. A key modifying assumption in internal control is that the internal control system is the
responsibility of management.
ANSWER: T PTS: 1
11. While the Sarbanes-Oxley Act prohibits auditors from providing non-accounting services to their
audit clients, they are not prohibited from performing such services for non-audit clients or privately
held companies.
ANSWER: T PTS: 1
12. The Sarbanes-Oxley Act requires the audit committee to hire and oversee the external auditors.
ANSWER: T PTS: 1
13. Section 404 requires that corporate management (including the CEO) certify their organization’s
internal controls on a quarterly and annual basis.
ANSWER: F PTS: 1
14. Section 302 requires the management of public companies to assess and formally report on the
effectiveness of their organization’s internal controls.
ANSWER: F PTS: 1
15. Application controls apply to a wide range of exposures that threaten the integrity of all programs
processed within the computer environment.
ANSWER: F PTS: 1
16. IT auditing is a small part of most external and internal audits.
ANSWER: F PTS: 1
, Te
4
ch
17. Advisory services is an emerging field that goes beyond the auditor’s traditional attestation
function.
Gu
ANSWER: T PTS: 1
ru
18. An IT auditor expresses an opinion on the fairness of the financial statements.
ANSWER: F PTS: 1
19. External auditing is an independent appraisal function established within an organization to
examine and evaluate its activities as a service to the organization.
ANSWER: F PTS: 1
20. External auditors can cooperate with and use evidence gathered by internal audit departments that
are organizationally independent and that report to the Audit Committee of the Board of Directors.
ANSWER: T PTS: 1
21. Tests of controls determine whether the database contents fairly reflect the organization's
transactions.
ANSWER: F PTS: 1
22. Audit risk is the probability that the auditor will render an unqualified opinion on financial
statements that are materially misstated.
ANSWER: T PTS: 1
23. A strong internal control system will reduce the amount of substantive testing that must be
performed.
ANSWER: T PTS: 1
24. Substantive testing techniques provide information about the accuracy and completeness of an
application's processes.
ANSWER: F PTS: 1
1
ch
TEST BANK Information Technology
Gu
Auditing 4th Edition by James Hall
ru
ALL CHAPTER 1-12 WITH ACCURATE ANSWERS
, Te
2
ch
Chapter 1—Auditing and Internal Control
Gu
TRUE/FALSE
1. Corporate management (including the CEO) must certify monthly and annually their
ru
organization’s internal controls over financial reporting.
ANSWER: F PTS: 1
2. Both the SEC and the PCAOB require management to use the COBIT framework for assessing
internal control adequacy.
ANSWER: F PTS: 1
3. Both the SEC and the PCAOB require management to use the COSO framework for assessing
internal control adequacy.
ANSWER: F PTS: 1
4. A qualified opinion on management’s assessment of internal controls over the financial reporting
system necessitates a qualified opinion on the financial statements?
ANSWER: F PTS: 1
5. The same internal control objectives apply to manual and computer-based information systems.
ANSWER: T PTS: 1
6. The external auditor is responsible for establishing and maintaining the internal control system.
ANSWER: F PTS: 1
7. Segregation of duties is an example of an internal control procedure.
ANSWER: T PTS: 1
8. Preventive controls are passive techniques designed to reduce fraud.
ANSWER: T PTS: 1
, Te
3
ch
9. The Sarbanes-Oxley Act requires only that a firm keep good records.
Gu
ANSWER: F PTS: 1
ru
10. A key modifying assumption in internal control is that the internal control system is the
responsibility of management.
ANSWER: T PTS: 1
11. While the Sarbanes-Oxley Act prohibits auditors from providing non-accounting services to their
audit clients, they are not prohibited from performing such services for non-audit clients or privately
held companies.
ANSWER: T PTS: 1
12. The Sarbanes-Oxley Act requires the audit committee to hire and oversee the external auditors.
ANSWER: T PTS: 1
13. Section 404 requires that corporate management (including the CEO) certify their organization’s
internal controls on a quarterly and annual basis.
ANSWER: F PTS: 1
14. Section 302 requires the management of public companies to assess and formally report on the
effectiveness of their organization’s internal controls.
ANSWER: F PTS: 1
15. Application controls apply to a wide range of exposures that threaten the integrity of all programs
processed within the computer environment.
ANSWER: F PTS: 1
16. IT auditing is a small part of most external and internal audits.
ANSWER: F PTS: 1
, Te
4
ch
17. Advisory services is an emerging field that goes beyond the auditor’s traditional attestation
function.
Gu
ANSWER: T PTS: 1
ru
18. An IT auditor expresses an opinion on the fairness of the financial statements.
ANSWER: F PTS: 1
19. External auditing is an independent appraisal function established within an organization to
examine and evaluate its activities as a service to the organization.
ANSWER: F PTS: 1
20. External auditors can cooperate with and use evidence gathered by internal audit departments that
are organizationally independent and that report to the Audit Committee of the Board of Directors.
ANSWER: T PTS: 1
21. Tests of controls determine whether the database contents fairly reflect the organization's
transactions.
ANSWER: F PTS: 1
22. Audit risk is the probability that the auditor will render an unqualified opinion on financial
statements that are materially misstated.
ANSWER: T PTS: 1
23. A strong internal control system will reduce the amount of substantive testing that must be
performed.
ANSWER: T PTS: 1
24. Substantive testing techniques provide information about the accuracy and completeness of an
application's processes.
ANSWER: F PTS: 1
