Advanced Auditing Test Bank
Course Introduction
Advanced Auditing is a comprehensive course that delves into the principles, techniques, and practices used in high-level audit engagements. The course covers advanced topics such as risk assessment, internal control evaluation, audit planning, sampling methods, forensic auditing, and the role of information technology in modern audits. It emphasizes the critical thinking and professional judgment required to address complex audit issues, including fraud detection, compliance with legal and ethical standards, and assurance services beyond traditional financial audits. Students will analyze case studies, apply auditing standards, and learn to communicate audit findings effectively, preparing them for leadership roles in the auditing profession.
Recommended Textbook
Information Technology Auditing 3rd Edition by James A. Hall
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12 Chapters
1295 Verified Questions
1295 Flashcards
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Chapter 1: Auditing and Internal Control
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103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/5812
Sample Questions
Q1) Why is an Independent Audit Committee important to a company?
Answer: The Sarbanes-Oxley Act requires all audit committee members to be independent and requires the audit committee to hire and oversee the external auditors.This provision is consistent with many investors who consider the board composition to be a critical investment factor.For example,Thompson Financial survey revealed that most institutional investors want corporate boards to be comprised of at least 75% of independent directors
Q2) Discuss the key features of Section 302 of the Sarbanes-Oxley Act.
Answer: Section 302 requires corporate management (including the chief executive officer [CEO])to certify financial and other information contained in the organization's quarterly and annual reports.The rule also requires them to certify the internal controls over financial reporting.The certifying officers are required to have designed internal controls,or to have caused such controls to be designed,and to provide reasonable assurance as to the reliability of the financial reporting process.Furthermore,they must disclose any material changes in the company's internal controls that have occurred during the most recent fiscal quarter.
Q3) Locking petty cash in a safe is an example of __________________________. Answer: access controls
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Page 3
Chapter 2: Auditing IT Governance Controls
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99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/5813
Sample Questions
Q1) Explain vendor exploitation.
Answer: Once the client firm has divested itself of specific assets it becomes dependent on the vendor.The vendor may exploit this dependency by raising service rates to an exorbitant level.As the client's IT needs develop over time beyond the original contract terms,it runs the risk that new or incremental services will be negotiated at a premium.This dependency may threaten the client's long term flexibility,agility and competitiveness and result in even greater vendor dependency.
Q2) A cold site backup approach is also known as
A) internally provided backup
B) recovery operations center
C) empty shell
D) mutual aid pact
Answer: C
Q3) The database administrator should be separated from systems development.
A)True
B)False
Answer: True
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Chapter 3: Security Part I: Auditing Operating Systems and Networks
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143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/5814
Sample Questions
Q1) Packet switching
A) combines the messages of multiple users into one packet for transmission. At the receiving end, the packet is disassembled into the individual messages and distributed to the intended users.
B) is a method for partitioning a database into packets for easy access where no identifiable primary user exists in the organization.
C) is used to establish temporary connections between network devices for the duration of a communication session.
D) is a denial of service technique that disassembles various incoming messages to targeted users into small packages and then reassembles them in random order to create a useless garbled message.
Answer: C
Q2) A value added network can detect and reject transactions by unauthorized trading partners.
A)True
B)False
Answer: True
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Chapter 4: IT Security Part II: Auditing Database Systems
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101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/5815
Sample Questions
Q1) All of the following are advantages of a partitioned database except A) increased user control by having the data stored locally
B) deadlocks are eliminated
C) transaction processing response time is improved
D) partitioning can reduce losses in case of disaster
Q2) The __________________________ describes every data element in the database.
Q3) Data normalization groups data attributes into tables in accordance with specific design objectives.
A)True
B)False
Q4) What is a replicated database and what are the advantages of this approach?
Q5) Under the database approach,data is viewed as proprietary or owned by users.
A)True
B)False
Q6) Data concurrency
A) is a security issue in partitioned databases
B) is implemented using timestamping
C) may result in data lockout
D) occurs when a deadlock is triggered.
6
Q7) What types of problems does data redundancy cause?
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Chapter 5: Systems Development and Program Change
Activities
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108 Verified Questions
108 Flashcards
Source URL: https://quizplus.com/quiz/5816
Sample Questions
Q1) The presence of a SPLMS effectively guarantees program integrity.
A)True
B)False
Q2) The output of the detailed design phase of the Systems Development Life Cycle (SDLC)is a
A) fully documented system report
B) systems selection report
C) detailed system design report
D) systems analysis report
Q3) List four types of facts that should be gathered during an analysis of a system.
Q4) Which control is not associated with new systems development activities?
A) reconciling program version numbers
B) program testing
C) user involvement
D) internal audit participation
Q5) Project feasibility includes all of the following except
A) technical feasibility
B) conceptual feasibility
C) operational feasibility
D) schedule feasibility
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Chapter 6: Overview of Transaction Processing and Financial Reporting Systems
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143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/5817
Sample Questions
Q1) Block codes restrict each class to a pre-specified range.
A)True
B)False
Q2) Which type of graphical documentation represents systems at different levels of detail?
A) data flow diagram
B) document flowchart
C) system flowchart
D) program flowchart
Q3) Give a specific example of a turn-around document.
Q4) Categorize each of the following activities into the expenditure,conversion or revenue cycles and identify the applicable subsystem.
a.Preparing the weekly payroll for manufacturing personnel.
b.Releasing raw materials for use in the manufacturing cycle.
c.Recording the receipt of payment for goods sold.
d.Recording the order placed by a customer.
e.Ordering raw materials.
f.Determining the amount of raw materials to order.
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Q5) Documents that are created at the beginning of the transaction are called
Chapter 7: Computer-Assisted Audit Tools and Techniques
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83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/5818
Sample Questions
Q1) All of the following are disadvantages of the test data technique except A) the test data technique requires extensive computer expertise on the part of the auditor
B) the auditor cannot be sure that the application being tested is a copy of the current application used by computer services personnel
C) the auditor cannot be sure that the application being tested is the same application used throughout the entire year
D) preparation of the test data is time-consuming
Q2) The results of a parallel simulation are compared to the results of a production run in order to judge the quality of the application processes and controls.
A)True
B)False
Q3) The black box approach to testing computer applications allows the auditor to explicitly review program logic.
A)True
B)False
Q4) Describe two types of transposition error
Q5) Give one example of an error that is detected by a check digit control.
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Chapter 8: Data Structures and CAATTs for Data Extraction
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89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/5819
Sample Questions
Q1) Explain how to link tables in (1:1)association.Why may this be different in a (1:0,1)association?
Q2) Which of the following is a relational algebra function?
A) restrict
B) project
C) join
D) all are relational algebra functions
Q3) Explain how a hashing structure works and why it is quicker than using an index.Give an example.If it so much faster,why isn't it used exclusively?
Q4) Why are the hierarchical and network models called navigational databases?
Q5) In the relational database model all of the following are true except A) data is presented to users as tables
B) data can be extracted from specified rows from specified tables
C) a new table can be built by joining two tables
D) only one-to-many relationships can be supported
Q6) What is a transitive dependency?
Q7) Give two limitations of the hierarchical database model?
Q8) How does the database approach solve the problem of data redundancy?
Q9) What are the three physical components of a VSAM file?
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Chapter 9: Auditing the Revenue Cycle
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105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/5820
Sample Questions
Q1) The shipping notice
A) is mailed to the customer
B) is a formal contract between the seller and the shipping company
C) is always prepared by the shipping clerk
D) informs the billing department of the quantities shipped
Q2) Distinguish between a packing slip,shipping notice,and a bill of lading.
Q3) In the revenue cycle,the internal control "limit access" applies to physical assets only.
A)True
B)False
Q4) What makes point-of-sale systems different from revenue cycles of manufacturing firms?
Q5) If a customer submits a written purchase order,there is no need to prepare a sales order.
A)True B)False
Q6) The warehouse is responsible for updating the inventory subsidiary ledger.
A)True B)False
Q7) What is the objective of re-engineering?
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Chapter 10: Auditing the Expenditure Cycle
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144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/5821
Sample Questions
Q1) When a trading partner agreement is in place,the traditional three way match may be eliminated.
A)True
B)False
Q2) What is the purpose of a receiving report?
Q3) Why should employee paychecks be drawn against a special checking account?
Q4) Ideally,payroll checks are written on a special bank account used only for payroll.
A)True
B)False
Q5) List specific jobs that should be segregated in the purchases processing system.
Q6) The document that records the total amount of time spent on a production job is the
A) time card
B) job ticket
C) labor distribution summary
D) personnel action form
Q7) Work-in-process records are updated by payroll personnel.
A)True
B)False
Page 12
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Chapter 12: Business Ethics, Fraud, and Fraud Detection
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85 Verified Questions
85 Flashcards
Source URL: https://quizplus.com/quiz/5822
Sample Questions
Q1) According to common law,there are five conditions that must be present for an act to be deemed fraudulent.Name and explain each.
Q2) Explain the Pay and Return scheme.
Q3) Distinguish between exposure and risk.
Q4) Collusion among employees in the commission of a fraud is difficult to prevent but easy to detect.
A)True
B)False
Q5) Defalcation is another word for financial fraud. A)True
B)False
Q6) The trend toward distributed data processing increases the exposure to fraud from remote locations.
A)True B)False
Q7) Give two examples of employee fraud and explain how the theft might occur.
Q8) Internal control systems are recommended but not required to prevent fraud. A)True B)False
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Chapter 11: Enterprise Resource Planning Systems
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92 Verified Questions
92 Flashcards
Source URL: https://quizplus.com/quiz/5823
Sample Questions
Q1) Supply chain management software
A) is typically under the control of external partners in the chain.
B) links all of the partners in the chain, including vendors, carriers, third-party firms, and information systems providers.
C) cannot be integrated into an overall ERP.
D) none of the above
Q2) Internal efficiency is cited as one reasone for separating the data warehouse from the operational database.Explain.
Q3) Describe the three-tier client server model.
Q4) Goals of ERP include all of the following except
A) improved customer service
B) improvements of legacy systems
C) reduced production time
D) increased production
Q5) Day-to-day transactions are stored in the operational database.
A)True
B)False
Q6) Data in a data warehouse are in a stable state.Explain how this can hamper data mining analysis? What can an organization do to alleviate this problem?
Page 14
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