Internal Control and Computer Based Information
Systems (CBIS)
MULTIPLE CHOICE:
1. In the weekly computer run to prepare payroll checks, a
check was printed for an employee who had been
terminated the previous week. Which of the
following controls, if properly utilized, would
have been most effective in preventing the error
or ensuring its prompt detection?
a. A control total for hours worked, prepared from time
cards collected by the timekeeping department.
b. Requiring the treasurer's office to account for the
number of the pre-numbered checks issued to the CBIS
department for the processing of the payroll.
c. Use of a check digit for employee numbers.
d. Use of a header label for the payroll input sheet.
ANSWER: A
2. An auditor is preparing test data for use in the audit of
a computer based accounts receivable application.
Which of the following items would be appropriate to include as
an item in the test data?
a. A transaction record which contains an incorrect master
file control total.
b. A master file record which contains an invalid customer
identification number.
c. A master file record which contains an incorrect master
file control total.
d. A transaction record which contains an invalid customer
identification number.
ANSWER: D
3. Unauthorized alteration of on-line records can be prevented
by employing:
a. Key verification.
b. Computer sequence checks.
c. Computer matching.
d. Data base access controls.
ANSWER: D
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4. In auditing through a computer, the test data method is used
by auditors to test the
a. Accuracy of input data.
b. Validity of the output.
c. Procedures contained within the program.
d. Normalcy of distribution of test data.
ANSWER: C
5. In the preliminary survey the auditor learns that a
department has several microcomputers. Which of the
following is usually true and should be considered
in planning the audit?
a. Microcomputers, though small, are capable of processing
financial information, and physical security is a
control concern.
b. Microcomputers are limited to applications such as
worksheet generation and do not present a significant
audit risk.
c. Microcomputers are generally under the control of the
data processing department and use the same control
features.
d. Microcomputers are too small to contain any built-in
control features. Therefore, other controls must be
relied upon.
ANSWER: A
6. The primary reason for internal auditing's involvement in
the development of new computer-based sysstems is to:
a. Plan post-implementation reviews.
b. Promote adequate controls.
c. Train auditors in CBIS techniques.
d. Reduce overall audit effort.
ANSWER: B
7. Which of the following is an advantage of generalized
computer audit packages?
a. They are all written in one identical computer
language.
b. They can be used for audits of clients that use
differing CBIS equipment and file formats.
c. They have reduced the need for the auditor to study
input controls for CBIS related procedures.
d. Their use can be substituted for a relatively large
part of the required control testing.
, Chapter 8 Internal Control and CBIS 122
ANSWER: B
8. Processing simulated file data provides the auditor with
information about the reliability of controls from evidence
that exists in simulated files. One of the techniques
involved in this approach makes use of
a. Controlled reprocessing.
b. Program code checking.
c. Printout reviews.
d. Integrated test facility.
ANSWER: D
9. Which of the following statements most likely represents a
disadvantage for an entity that keeps microcomputer-prepared
data files rather than manually prepared files?
a. It is usually more difficult to detect transposition
errors.
b. Transactions are usually authorized before they are
executed and recorded.
c. It is usually easier for unauthorized persons to access
and alter the files.
d. Random error associated with processing similar
transactions in different ways is usually greater.
ANSWER: C
10. The possibility of losing a large amount of information
stored in computer files most likely would be reduced by the
use of
a. Back-up files
b. Check digits
c. Completeness tests
d. Conversion verification.
ANSWER: A
11. An integrated test facility (ITF) would be appropriate when
the auditor needs to
a. Trace a complex logic path through an application
system.
b. Verify processing accuracy concurrently with
processing.
c. Monitor transactions in an application system
continuously.
d. Verify load module integrity for production programs.
Systems (CBIS)
MULTIPLE CHOICE:
1. In the weekly computer run to prepare payroll checks, a
check was printed for an employee who had been
terminated the previous week. Which of the
following controls, if properly utilized, would
have been most effective in preventing the error
or ensuring its prompt detection?
a. A control total for hours worked, prepared from time
cards collected by the timekeeping department.
b. Requiring the treasurer's office to account for the
number of the pre-numbered checks issued to the CBIS
department for the processing of the payroll.
c. Use of a check digit for employee numbers.
d. Use of a header label for the payroll input sheet.
ANSWER: A
2. An auditor is preparing test data for use in the audit of
a computer based accounts receivable application.
Which of the following items would be appropriate to include as
an item in the test data?
a. A transaction record which contains an incorrect master
file control total.
b. A master file record which contains an invalid customer
identification number.
c. A master file record which contains an incorrect master
file control total.
d. A transaction record which contains an invalid customer
identification number.
ANSWER: D
3. Unauthorized alteration of on-line records can be prevented
by employing:
a. Key verification.
b. Computer sequence checks.
c. Computer matching.
d. Data base access controls.
ANSWER: D
120
,121 Chapter 8 Internal Control and CBIS
4. In auditing through a computer, the test data method is used
by auditors to test the
a. Accuracy of input data.
b. Validity of the output.
c. Procedures contained within the program.
d. Normalcy of distribution of test data.
ANSWER: C
5. In the preliminary survey the auditor learns that a
department has several microcomputers. Which of the
following is usually true and should be considered
in planning the audit?
a. Microcomputers, though small, are capable of processing
financial information, and physical security is a
control concern.
b. Microcomputers are limited to applications such as
worksheet generation and do not present a significant
audit risk.
c. Microcomputers are generally under the control of the
data processing department and use the same control
features.
d. Microcomputers are too small to contain any built-in
control features. Therefore, other controls must be
relied upon.
ANSWER: A
6. The primary reason for internal auditing's involvement in
the development of new computer-based sysstems is to:
a. Plan post-implementation reviews.
b. Promote adequate controls.
c. Train auditors in CBIS techniques.
d. Reduce overall audit effort.
ANSWER: B
7. Which of the following is an advantage of generalized
computer audit packages?
a. They are all written in one identical computer
language.
b. They can be used for audits of clients that use
differing CBIS equipment and file formats.
c. They have reduced the need for the auditor to study
input controls for CBIS related procedures.
d. Their use can be substituted for a relatively large
part of the required control testing.
, Chapter 8 Internal Control and CBIS 122
ANSWER: B
8. Processing simulated file data provides the auditor with
information about the reliability of controls from evidence
that exists in simulated files. One of the techniques
involved in this approach makes use of
a. Controlled reprocessing.
b. Program code checking.
c. Printout reviews.
d. Integrated test facility.
ANSWER: D
9. Which of the following statements most likely represents a
disadvantage for an entity that keeps microcomputer-prepared
data files rather than manually prepared files?
a. It is usually more difficult to detect transposition
errors.
b. Transactions are usually authorized before they are
executed and recorded.
c. It is usually easier for unauthorized persons to access
and alter the files.
d. Random error associated with processing similar
transactions in different ways is usually greater.
ANSWER: C
10. The possibility of losing a large amount of information
stored in computer files most likely would be reduced by the
use of
a. Back-up files
b. Check digits
c. Completeness tests
d. Conversion verification.
ANSWER: A
11. An integrated test facility (ITF) would be appropriate when
the auditor needs to
a. Trace a complex logic path through an application
system.
b. Verify processing accuracy concurrently with
processing.
c. Monitor transactions in an application system
continuously.
d. Verify load module integrity for production programs.
