Professional Documents
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INSTRUCTIONS:
Encircle the letter of the BEST answer for each Multiple Choice Question.
Any form of cheating will be dealt accordingly. Failure to comply with any of these rules will
get no merit in this examination.
2. Which test of controls will provide evidence that the system as originally implemented was
free from material errors and free from fraud? Review of the documentation indicates that
a. a cost-benefit analysis was conducted
b. the detailed design was an appropriate solution to the user's problem
c. tests were conducted at the individual module and total system levels prior to
implementation
d. problems detected during the conversion period were corrected in the maintenance phase
5. Which control is not a part of the source program library management system?
a. using passwords to limit access to application programs
b. assigning a test name to all programs undergoing maintenance
c. combining access to the development and maintenance test libraries
d. assigning version numbers to programs to record program modifications
6. Which control ensures that production files cannot be accessed without specific permission?
a. Database Management System c. Source Program Library Management System
b. Recovery Operations Function d. Computer Services Function
7. 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
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errors.
c. An audit objective for systems maintenance is to verify that user requests for maintenance
reconcile to program version numbers.
d. An audit objective for systems maintenance is to ensure that the production libraries are
protected from unauthorized access.
9. When the auditor reconciles the program version numbers, which audit objective is being
tested?
a. protect applications from unauthorized changes
b. ensure applications are free from error
c. protect production libraries from unauthorized access
d. ensure incompatible functions have been identified and segregated
12. The benefits of the object-oriented approach to systems design include all of the
following except
a. this approach does not require input from accountants and auditors
b. development time is reduced
c. a standard module once tested does not have to be retested until changes are made
d. system maintenance activities are simplified
13. Which level of a data flow diagram is used to produce program code and database
tables?
a. context level c. intermediate level
b. elementary level d. prototype level
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18. A commercial software system that is completely finished, tested, and ready for
implementation is called a
a. backbone system c. benchmark system
b. vendor-supported system d. turnkey system
19. Which of the following is not an advantage of commercial software? Commercial software
a. can be installed faster than a custom system
b. can be easily modified to the user’s exact specifications
c. is significantly less expensive than a system developed in-house
d. is less likely to have errors than an equivalent system developed in-house
20. Which step is least likely to occur when choosing a commercial software package?
a. a detailed review of the source code c. preparation of a request for proposal
b. contact with user groups d. comparison of the results of a benchmark problem
21. The output of the detailed design phase of the Systems Development Life Cycle (SDLC) is a
a. fully documented system report c. detailed system design report
b. systems selection report d. systems analysis report
22. The detailed design report contains all of the following except
a. input screen formats c. report layouts
b. alternative conceptual designs d. process logic
23. System documentation is designed for all of the following groups except
a. systems designers and programmers
b. end users
c. accountants
d. all of the above require systems documentation
24. Which type of documentation shows the detailed relationship of input files, programs, and
output files?
a. structure diagrams c. system flowchart
b. overview diagram d. program flowchart
25. Typical contents of a run manual include all of the following except
a. run schedule c. file requirements
b. logic flowchart d. explanation of error messages
26. Computer operators should have access to all of the following types of documentation except
a. a list of users who receive output c. a list of all master files used I the system
b. a program code listing d. a list of required hardware devices
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a. crane used to install equipment c. supplies
b. freight charges d. reinforcement of the building floor
33. When a firm wants its coding system to convey meaning without reference to any other
document, it would choose
a. an alphabetic code c. a group code
b. a mnemonic code d. a block code
36. 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
37. Which statement is not correct? The general ledger master file
a. is based on the firm’s chart of account
b. contains a record for control accounts
c. is an output of the Financial Reporting System (FRS)
d. supplies information for management decision making
38. What type of data is found in the general ledger master file?
a. a chronological record of all transactions
b. the balance of each account in the chart of accounts
c. budget records for each account in the chart of accounts
d. subsidiary details supporting a control account
39. Which report is not an output of the Financial Reporting System (FRS)?
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a. variance analysis report c. tax return
b. statement of cash flows d. comparative balance sheet
40. Which steps in the Financial Accounting Process are in the correct sequence?
a. record the transaction, post to the ledger, prepare the adjusted trial balance, enter adjusting
entries, prepare financial statements
b. record the transaction, prepare the unadjusted trial balance, record adjusting journal
entries, record closing entries, prepare financial statements
c. record the transaction, post to the ledger, record adjusting entries, prepare the unadjusted
trial balance, prepare financial statements
d. record the transaction, post to the ledger, prepare the adjusted trial balance, prepare
financial statements, record closing entries
44. Risk exposures in the General Ledger and Financial Reporting Systems include all of the
following except
a. loss of the audit trail
b. unauthorized access to the general ledger
c. loss of physical assets
d. general ledger account out of balance with the subsidiary account
45. Which situation indicates an internal control risk in the General Ledger/Financial Reporting
Systems (GL/FRS)?
a. the employee who maintains the cash journal computes depreciation expense
b. the cash receipts journal voucher is approved by the Treasurer
c. the cash receipts journal vouchers are prenumbered and stored in a locked safe
d. the employee who maintains the cash receipts journal records transactions in the accounts
receivable subsidiary ledger
46. With a limited work force and a desire to maintain strong internal control, which combination
of duties performed by a single individual presents the least risk exposure?
a. maintaining the inventory ledger and recording the inventory journal voucher in the
general ledger
b. recording the inventory journal voucher in the general ledger and maintaining custody of
inventory
c. maintaining the cash disbursements journal and recording direct labor costs applied to
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specific jobs
d. preparing the accounts payable journal voucher and recording it in the general ledger
47. XBRL
a. is the basic protocol that permits communication between Internet sites.
b. controls Web browsers that access the Web.
c. is the document format used to produce Web pages.
d. was designed to provide the financial community with a standardized method for
preparing
e. is a low-level encryption scheme used to secure transmissions in higher-level (HTTP)
format.
49. Which statement is not correct? The audit trail in a computerized environment
a. consists of records that are stored sequentially in an audit file
b. traces transactions from their source to their final disposition
c. is a function of the quality and integrity of the application programs
d. may take the form of pointers, indexes, and embedded keys
50. All of the following concepts are associated with the black box approach to auditing computer
applications except
a. the application need not be removed from service and tested directly
b. auditors do not rely on a detailed knowledge of the application's internal logic
c. the auditor reconciles previously produced output results with production input
transactions
d. this approach is used for complex transactions that receive input from many sources
52. When analyzing the results of the test data method, the auditor would spend the least
amount of time reviewing
a. the test transactions c. updated master files
b. error reports d. output reports
53. All of the following are advantages of the test data technique except
a. auditors need minimal computer expertise to use this method
b. this method causes minimal disruption to the firm's operations
c. the test data is easily compiled
d. the auditor obtains explicit evidence concerning application functions
54. All of the following are disadvantages of the test data technique except
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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
56. The correct purchase order number,is123456. All of the following are transcription errors
except
a. 1234567 c. 124356
b. 12345 d. 123454
58. Which statement is not correct? The goal of batch controls is to ensure that during processing
a. transactions are not omitted
b. transactions are not added
c. transactions are free from clerical errors
d. an audit trail is created
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63. Which input control check would detect a payment made to a nonexistent vendor?
a. missing data check c. range check
b. numeric/alphabetic check d. validity check
64. Which input control check would detect a posting to the wrong customer account?
a. missing data check c. reasonableness check
b. check digit d. validity check
65. The employee entered "40" in the "hours worked per day" field. Which check would detect
this unintentional error?
a. numeric/alphabetic data check c. limit check
b. sign check d. missing data check
66. An inventory record indicates that 12 items of a specific product are on hand. A customer
purchased two of the items, but when recording the order, the data entry clerk mistakenly entered
20 items sold. Which check could detect this error?
a. numeric/alphabetic data checks c. range check
b. limit check d. reasonable check
68. A computer operator was in a hurry and accidentally used the wrong master file to
process a transaction file. As a result, the accounts receivable master file was erased.
Which control would prevent this from happening?
a. header label check c. version check
b. expiration date check d. validity check
69. 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
70. Methods used to maintain an audit trail in a computerized environment include all of the
following except
a. transaction logs c. data encryption
b. Transaction Listings. d. log of automatic transactions