ACCT 4631 - INTERNAL AUDITING: CIA
QUIZ TOPIC 7 QUESTIONS AND
ANSWERS WITH VERIFIED SOLUTIONS
2024
The most common computer-related problem confronting organizations is
A. Disruption to computer processing caused by natural disasters.
B. Fraud.
C. Hardware malfunction.
D. Input errors and omissions. - ANSWER Answer D is correct.
The most common problem confronting an organization in its use of computers is erroneous or
incomplete input. Input is especially susceptible to errors and omissions because of the substantial
human intervention required. Comprehensive and effective input controls are necessary to ensure that
data stored in files or used in processing are not contaminated.
A firm has recently converted its purchasing cycle from a manual process to an online computer system.
Which of the following is a probable result associated with conversion to the new automatic system?
A. The firm's risk exposures are reduced.
B. Processing time is increased.
C. Traditional duties are less segregated.
D. Processing errors are increased. - ANSWER Answer C is correct.
In a manual system with appropriate internal control, separate individuals are responsible for authorizing
transactions, recording transactions, and custody of assets. These checks and balances prevent fraud and
detect inaccurate or incomplete transactions. In a computer environment, however, this segregation of
duties is not always feasible. For example, a computer may print checks, record disbursements, and
generate information for reconciling the account balance.
When assessing application controls, which one of the following input controls or edit checks is most
likely to be used to detect a data input error in the customer account number field?
A. Limit check.
B. Hash total.
C. Validity check.
, D. Control total. - ANSWER Answer C is correct.
Validity checks are tests of identification numbers or transaction codes for validity by comparison with
items already known to be correct or authorized. For example, Social Security numbers on payroll input
records can be compared with Social Security numbers authorized by the personnel department.
Compared to batch processing, real-time processing has which of the following advantages?
A. Timeliness of information.
B. Efficiency of processing.
C. Ease of implementation.
D. - ANSWER Answer A is correct.
Real-time processing involves processing an input record and receiving the output soon enough to affect
a current decision-making process. Thus, the emphasis is on receiving the output in a timely fashion. In
comparison, the batch approach is suitable for applications that can be processed at intervals.
The concept of timeliness of data availability is most relevant to
A. Computerized systems.
B. Manual systems.
C. Payroll systems.
D. Online systems. - ANSWER Answer D is correct.
An online processing system is in direct communication with the computer, giving it the capability to
handle transactions as they are entered. An online system permits both immediate posting (updating)
and inquiry of master files as transactions occur. In an online system, data are immediately available to
users upon entry.
A small client recently put its cash disbursements system on a server. About which of the following
internal control features would an auditor most likely be concerned?
A. There are restrictions on the amount of data that can be stored and on the length of time that data
can be stored.
B. Programming of the applications are in Visual Basic rather than Java.
C. The server is operated by employees who have cash custody responsibilities.
D. Only one employee has the password to gain access to the cash disbursement system. - ANSWER
Answer C is correct.
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