Fraud Examination and IT Controls Practice Exam
Course Introduction
This course explores the principles and practices involved in detecting, investigating, and preventing fraud within organizations, with a strong focus on the role of information technology controls. Students will examine the various types of occupational fraud, methods used by perpetrators, and the techniques available to uncover fraudulent activities. Through case studies and real-world examples, the course delves into the design and evaluation of IT controls aimed at mitigating fraud risks, including internal controls, audit trails, data analytics, and computerized fraud detection tools. By the end of the course, students will understand how to assess vulnerabilities in both manual and automated systems, implement effective controls, and contribute to the overall integrity of organizational processes.
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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Page 2
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) A physical inventory count is an example of a
A) preventive control
B) detective control
C) corrective control
D) Feed-forward control
Answer: B
Q2) Section 404 requires management to make a statement identifying the control framework used to conduct their assessment of internal controls.Discuss the options in selecting a control framework.
Answer: The SEC has made specific reference to the Committee of the Sponsoring Organizations of the Treadway Commission (COSO)as a recommended control framework.Furthermore,the PCAOB's Auditing Standard No.2 endorses the use of COSO as the framework for control assessment.Although other suitable frameworks have been published,according to Standard No.2,any framework used should encompass all of COSO's general themes.
Q3) The Sarbanes-Oxley Act requires the audit committee to hire and oversee the external auditors.
A)True
B)False
Answer: True
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Chapter 2: Auditing IT Governance Controls
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99 Verified Questions
99 Flashcards
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Sample Questions
Q1) Which of the following disaster recovery techniques may be least optimal in the case of a disaster?
A)empty shell
B)mutual aid pact
C)internally provided backup
D)they are all equally beneficial.
Answer: B
Q2) What is an auditor looking for when testing computer center controls?
Answer: When testing computer center controls,the auditor is trying to determine that the physical security controls are adequate to protect the organization from physical exposures,that insurance coverage on equipment is adequate,that operator documentation is adequate to deal with operations and failures,and that the disaster recovery plan is adequate and feasible.
Q3) A disadvantage of distributed data processing is
A)the increased time between job request and job completion.
B)the potential for hardware and software incompatibility among users.
C)the disruption caused when the mainframe goes down.
D)that users are not likely to be involved.
Answer: B
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4
Chapter 3: Security Part I: Auditing Operating Systems and Networks
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) Audit trails cannot be used to
A) detect unauthorized access to systems
B) facilitate reconstruction of events
C) reduce the need for other forms of security
D) promote personal accountability
Answer: C
Q2) Advance encryption standard (AES)is
A) a 64 -bit private key encryption technique
B) a 128-bit private key encryption technique
C) a 128-bit public key encryption technique
D) a 256-bit public encryption technique that has become a U.S. government standard
Answer: B
Q3) A worm is software program that replicates itself in areas of idle memory until the system fails.
A)True
B)False
Answer: True
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Page 5
Chapter 4: IT Security Part II: Auditing Database Systems
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) The physical database is an abstract representation of the database.
A)True
B)False
Q2) Examining programmer authority tables for information about who has access to Data Definition Language commands will provide evidence about who is responsible for creating subschemas.
A)True
B)False
Q3) Which procedure will prevent two end users from accessing the same data element at the same time?
A) data redundancy
B) data replication
C) data lockout
D) none of the above
Q4) Timestamping is a control that is used to ensure database partitioning.
A)True
B)False
Q5) Explain a database lockout and the deadlock phenomenon.Contrast that to concurrency control and the timestamping technique.Describe the importance of these items in relation to database integrity.
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Chapter 5: Systems Development and Program Change
Activities
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) Recurring costs include all of the following except
A) data conversion
B) software maintenance
C) insurance
D) supplies
Q2) The presence of a SPLMS effectively guarantees program integrity.
A)True
B)False
Q3) One time costs include all of the following except
A) site preparation
B) insurance
C) programming and testing
D) data conversion
Q4) The user test and acceptance procedure is the last point at which the user can determine the system's acceptability prior to it going into service.
A)True
B)False
Q5) Why is it important that the systems professionals who design a project not perform the detailed feasibility study of the project?
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Chapter 6: Overview of Transaction Processing and Financial Reporting Systems
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) Which system is not part of the expenditure cycle?
A) cash disbursements
B) payroll
C) production planning/control
D) purchases/accounts payable
Q2) Backups are automatically produced in a direct access file environment.
A)True
B)False
Q3) In contrast to a batch processing system,in a real-time system
A) a lag occurs between the time of the economic event and when the transaction is recorded
B) relatively fewer hardware, programming, and training resources are required
C) a lesser resource commitment per unit of output is required
D) processing takes place when the economic event occurs.
Q4) Entries into the General Ledger System (GLS)can be made using information from
A) the general journal
B) a journal voucher which represents a summary of similar transactions
C) a journal voucher which represents a single, unusual transaction
D) all of the above
Q5) What information is provided by a record layout diagram?
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Chapter 7: Computer-Assisted Audit Tools and Techniques
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) The black box approach to testing computer applications require a detailed knowledge of the the program logic being tested.
A)True
B)False
Q2) Program testing
A) involves individual modules only, not the full system
B) requires creation of meaningful test data
C) need not be repeated once the system is implemented
D) is primarily concerned with usability
Q3) Run-to-run control totals can be used for all of the following except
A) to ensure that all data input is validated
B) to ensure that only transactions of a similar type are being processed
C) to ensure the records are in sequence and are not missing
D) to ensure that no transaction is omitted
Q4) The integrated test facility (ITF)is an automated approach that permits auditors to test an application's logic and controls during its normal operation.
A)True
B)False
Q5) What are the five major components of a GDIS?
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Chapter 8: Data Structures and CAATTs for Data Extraction
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89 Verified Questions
89 Flashcards
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Sample Questions
Q1) How can a poorly designed database result in unintentional loss of critical records?
Q2) 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
Q3) Each of the following is a relational algebra function except
A) join
B) project
C) link
D) restrict
Q4) A table is in third normal form when it is
A) free of repeating group data
B) free of transitive dependencies
C) free of partial dependencies
D) free of deletion anomalies
E) none of the above.
Q5) Explain how to link tables in (1:1)association.Why may this be different in a (1:0,1)association?
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Chapter 9: Auditing the Revenue Cycle
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) What features of a reengineered cash receipts system contribute to improved control and reduced costs? What complicates the process?
Q2) A bill of lading is a request for payment for shipping charges.
A)True
B)False
Q3) List two points in the sales processing system when authorization is required.
Q4) What is the purpose of the credit memo?
Q5) An advantage of real-time processing of sales is
A) the cash cycle is lengthened
B) current inventory information is available
C) hard copy documents provide a permanent record of the transaction
D) data entry errors are corrected at the end of each batch
Q6) The purpose of the invoice is to bill the customer.
A)True
B)False
Q7) The billing department is not responsible for
A) updating the inventory subsidiary records
B) recording the sale in the sales journal
C) notifying accounts receivable of the sale
D) sending the invoice to the customer
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Chapter 10: Auditing the Expenditure Cycle
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) In a real-time processing system with a high number of transactions,the best and most practical control over cash disbursements is to have
A) all checks manually signed by the treasurer
B) all checks signed by check-signing equipment
C) checks over a certain dollar amount manually signed by the treasurer
D) checks over a certain dollar amount manually signed by the cash disbursements clerk
Q2) What is the purpose of the purchase order?
Q3) Authorization for a cash disbursement occurs in the cash disbursement department upon receipt of the supplier's invoice.
A)True
B)False
Q4) The cash disbursement clerk performs all of the following tasks except
A) reviews the supporting documents for completeness and accuracy
B) prepares checks
C) signs checks
D) marks the supporting documents paid
Q5) Which internally generated document should be compared to the supplier's invoice to verify the quantity being billed for?
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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) The ethical principle of justice asserts that the benefits of the decision should be distributed fairly to those who share the risks.
A)True
B)False
Q2) Forces which may permit fraud to occur do not include
A) a gambling addiction
B) lack of segregation of duties
C) centralized decision making environment
D) questionable integrity of employees
Q3) Explain the problems associated with lack of director independence
Q4) Which of the following best describes lapping?
A) applying cash receipts to a different customer's account in an attempt to conceal previous thefts of funds
B) inflating bank balances by transferring money among different bank accounts
C) expensing an asset that has been stolen
D) creating a false transaction
Q5) Explain the pass through fraud.
Q6) What is the objective of SAS 99?
Q7) What is scavenging?
13
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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) Define the term "core applications" and give some examples.
Q2) The setup of a data warehouse includes
A) modeling the data
B) extracting data from operational databases
C) cleansing the data
D) all of the above
Q3) What is data mining?
Q4) Which of the following statements is not true?
A) In a typical two-tier client server system, the server handles both application and database duties.
B) Client computers are responsible for presenting data to the user and passing user input back to the server.
C) In three-tier client server architecture, one tier is for user presentations, one is for database and applications, and the third is for Internet access.
D) The database and application functions are separate in the three-tier model.
Q5) Efficient supply-chain management provides firms with a competitive advantage.
A)True
B)False
Q6) Why does data need to be "cleansed"?
Page 14
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