Which of the following is least likely a risk characteristic associated with cis environment?

AUDITING IN A COMPUTERIZED ENVIRONMENT

1. Which statement is incorrect when auditing in a CIS

environment?

a. A CIS environment exists when a computer of any

type or size is involved in the processing by the entity

of financial information of significance to the audit,

whether that computer is operated by the entity or by

a third party.

b. The auditor should consider how a CIS environment

affects the audit.

c. The use of a computer changes the processing,

storage and communication of financial information

and may affect the accounting and internal control

systems employed by the entity.

d. A CIS environment changes the overall objective and

scope of an audit.

2. Which of the following standards or group of standards is

mostly affected by a computerized information system

environment?

a. General standards

b. Reporting standards

c. Second standard of field work

d. Standards of fieldwork

3. Which of the following is least considered if the auditor has to

determine whether specialized CIS skills are needed in an

audit?

a. The auditor needs to obtain a sufficient

understanding of the accounting and internal control

system affected by the CIS environment.

b. The auditor needs to determine the effect of the CIS

environment on the assessment of overall risk and of

risk at the account balance and class of transactions

level.

c. Design and perform appropriate tests of controls and

substantive procedures.

d. The need of the auditor to make analytical

procedures during the completion stage of audit.

4. It relates to materiality of the financial statement assertions

affected by the computer processing.

a. Threshold

b. Relevance

c. Complexity

d. Significance

5. Which of the following least likely indicates a complexity of

computer processing?

a. Transactions are exchanged electronically with other

organizations without manual review of their

propriety.

b. The volume of the transactions is such that users

would find it difficult to identify and correct errors in

processing.

c. The computer automatically generates material

transactions or entries directly to another

applications.

d. The system generates a daily exception report

6. The nature of the risks and the internal characteristics in CIS

environment that the auditors are mostly concerned include the

following except:

a. Lack of segregation of functions.

b. Lack of transaction trails.

c. Dependence of other control over computer

processing.

d. Cost-benefit ratio.

7. Which of the following is least likely a risk characteristic

associated with CIS environment?

a. Errors embedded in an application’s program logic

maybe difficult to manually detect on a timely basis.

b. Many control procedures that would ordinarily be

performed by separate individuals in manual system

maybe concentrated in CIS.

c. The potential unauthorized access to data or to alter

them without visible evidence maybe greater.

d. Initiation of changes in the master file is exclusively

handled by respective users.

8. Which of the following significance and complexity of the CIS

activities should an auditor least understand?

a. The organizational structure of the client’s CIS

activities.

b. Lack of transaction trails.

c. The significance and complexity of computer

processing in each significant accounting application.

d. The use of software packages instead of customized

software.

9. Which statement is correct regarding personal computer

systems?

a. Personal computers or PCs are economical yet

powerful self-contained general purpose computers

consisting typically of a central processing unit

(CPU), memory, monitor, disk drives, printer cables

and modems.

b. Programs and data are stored only on non-

removable storage media.

c. Personal computers cannot be used to process

accounting transactions and produce reports that are

essential to the preparation of financial statements.

d. Generally, CIS environments in which personal

computers are used are the same with other CIS

environments.

10. A personal computer can be used in various configurations,

including

a. A stand-alone workstation operated by a single user

or a number of users at different times.

b. A workstation which is part of a local area network of

personal computers.

c. A workstation connected to a server.

d. All of the above.

11. Which statement is incorrect regarding personal computer

configurations?

a. The stand-alone workstation can be operated by a

single user or a number of users at different times

accessing the same or different programs.

b. A stand-alone workstation may be referred to as a

distributed system.

c. A local area network is an arrangement where two

or more personal computers are linked together

through the use of special software and

communication lines.

d. Personal computers can be linked to servers and

used as part of such systems, for example, as an

intelligent on-line workstation or as part of a

distributed accounting system.

12. Which of the following is the least likely characteristic of

personal computers?

a. They are small enough to be transportable.

b. They are relatively expensive.

c. They can be placed in operation quickly.

d. The operating system software is less

comprehensive than that found in larger computer

environments.

13. Which of the following is an inherent characteristic of software

package?

a. They are typically used without modifications of the

programs.

b. The programs are tailored-made according to the

specific needs of the user.

c. They are developed by software manufacturer

according to a particular user’s specifications.

d. It takes a longer time of implementation.

What are the characteristics of CIS environment?

What is a CIS environment?

What is the greatest risk to an automated information processing system?

Which of the following Least Likely Protects critical and sensitive information from unauthorized access in a personal computer environment *?