INTERNATIONAL SCHOOL OF ASIA AND THE PACIFIC

Alimannao Hills, Peñablanca, Cagayan 3502 Philippines

Telefax No: (+63) (078) 304-1010
Website: www.isap.edu.ph E-Mail Address: adminoffice@isap.edu.ph

C OLLEGE OF B USINESS E DUCATION AND M ANAGEMENT

ACCOUNTANCY DEPARTMENT
Subject Code : PRE 5
Subject Title : AUDITING IN A CIS ENVIRONMENT
Term : MIDTERM Examination
Semester : First Fiscal Year: 2020 – 2021
Platform Used : INSTRUCTIONAL LEARNING GUIDE or LEARNING MANAGEMENT SYSTEM

Name: ______________________________Year and section: ____________________

Proctor: _____________________________Score: _____________________________

Directions: Read and answer the following questions carefully. Write your answers on a yellow sheet of
paper. Use capital letters and BLACK BALLPEN only. GOOD LUCK and GOD BLESS!

TRUE OR FALSE: Write “pneumonoultramiscoscopicsilicovulcanoconiosis” if the statement is TRUE and

“supercalifragilisticexpialidocious” if the statement is FALSE.

1. Magnetic tape drives have the advantage of direct access to stored data. 
2. The operating system is an example of system software. 
3. For good internal control, programmers should not be given access to complete program documentation for
the programs they work on. 
4. Data encryption is an example of data transmission control. 
5. Internal file labels are designed to prevent errors by programmers. 
6. For auxiliary storage when the computer is operating, personal computers use hard disk drives. 
7. Distributive data processing eliminates the need for data security. 
8. Most advanced computer systems do not have audit trails. 
9. Auditors usually begin their consideration of IT systems with tests of application controls. 
10. Generalized audit software may be used for substantive tests or for tests of controls. 

MULTIPLE CHOICE QUESTIONS: Select the best answer for the following questions. Write your answers in
CAPITAL LETTERS only.

11. Which of the following procedures would an entity most likely include in its disaster recovery plan? 
A. Convert all data from external formats to an internal company format.
B. Maintain a program to prevent illegal activity.
C. Develop an auxiliary power supply to provide uninterrupted electricity.
D. Store duplicate copies of files in a location away from the computer center.

12. A service auditor's report on a service center should include a(n) 

A. Detailed description of the service center's internal control.
B. Statement that the user of the report may assess control risk at the minimum level.
C. Indication that no assurance is provided.
D. Opinion on the operating effectiveness of the service center's internal control.

13. Which of the following is a password security problem? 

A. Users are assigned passwords when accounts are created, but do not change them.
B. Users have accounts on several systems with different passwords.
C. Users copy their passwords on note paper, which is kept in their wallets.
D. Users select passwords that are not listed in any online dictionary.

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 INTERNATIONAL SCHOOL OF ASIA AND THE PACIFIC
Alimannao Hills, Peñablanca, Cagayan 3502 Philippines
Telefax No: (+63) (078) 304-1010
Website: www.isap.edu.ph E-Mail Address: adminoffice@isap.edu.ph

C OLLEGE OF B USINESS E DUCATION AND M ANAGEMENT

ACCOUNTANCY DEPARTMENT
14. Which of the following is a software component of a computer system? 
A. The operating system.
B. The storage unit.
C. The display monitor
D. The optical scanner.

15. Which of the following is least likely to be a general control over computer activities? 
A. Procedures for developing new programs and systems.
B. Requirements for system documentation.
C. A change request log.
D. A control total.

16. Which of the following computer related employees should not be allowed access to program listings of
application programs? 
A. The systems analyst.
B. The programmer.
C. The operator.
D. The librarian.

17. The advent of personal computers has resulted in a(n): 

A. Decentralization of data processing activities.
B. Increased concern over the accuracy of computerized processing.
C. Decrease in the number of local area networks.
D. Increase for general computer control activities.

18. Which of the following is most likely to include user group development and execution of certain computer
applications? 
A. Telecommunication transmission systems.
B. Database administration.
C. End user computing.
D. Electronic data interchange systems.

19. Which of the following is not a data transmission control? 

A. Echo checks.
B. Data encryption.
C. File labels.
D. Parity checks.

20. Which of the following is an example of general computer control? 

A. Input validation checks.
B. Control total.
C. Operations manual.
D. Generalized audit software.

21. Which of the following would the auditors consider to be a weakness in an IT system? 

A. Operators have access to terminals.
B. Programmers are allowed access to the file library.
C. Reprocessing of exceptions detected by the computer is handled by a data control group.
D. More than one employee is present when the computer facility is in use.

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 INTERNATIONAL SCHOOL OF ASIA AND THE PACIFIC
Alimannao Hills, Peñablanca, Cagayan 3502 Philippines
Telefax No: (+63) (078) 304-1010
Website: www.isap.edu.ph E-Mail Address: adminoffice@isap.edu.ph

C OLLEGE OF B USINESS E DUCATION AND M ANAGEMENT

ACCOUNTANCY DEPARTMENT
22. Which of the following is least likely to be tested with generalized audit software? 
A. An aging of accounts receivable.
B. A schedule of inventory.
C. A depreciation schedule.
D. A computer operations manual.

23. Which of the following would be least likely to be considered a desirable attribute of a database
management system? 
A. Data redundancy.
B. Quick response to users' request for information.
C. Control of users' identification numbers and passwords.
D. Logging of terminal activity.

24. A problem for a CPA associated with advanced IT systems is that: 

A. The audit trail normally does not exist.
B. The audit trail is sometimes generated only in machine readable form.
C. The client's internal auditors may have been involved at the design stage.
D. Tests of controls are not possible.

25. Which of the following testing techniques is more commonly used by internal auditors than by independent
auditors? 
A. Integrated test facilities.
B. Test data.
C. Controlled programs.
D. Tagging and tracing transactions.

26. General controls over IT systems are typically tested using: 

A. Generalized audit software.
B. Observation, inspection, and inquiry.
C. Program analysis techniques.
D. Test data.

27. When conducting field work for a physical inventory, an auditor cannot perform which of the following
steps using a generalized audit software package? 
A. Observing inventory.
B. Selecting sample items of inventory.
C. Analyzing data resulting from inventory.
D. Recalculating balances in inventory reports. 

28. Which of the following personnel is responsible for determining the computer processing needs of the
various users? 
A. The application programmer.
B. The computer operator.
C. The systems analyst.
D. The systems programmer

29. Which of the following testing techniques minimizes the possibility that the auditors will contaminate a
client's financial records? 
A. Test data.
B. Integrated test facilities.
C. Controlled programs.
D. Tagging and tracing transactions
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 INTERNATIONAL SCHOOL OF ASIA AND THE PACIFIC
Alimannao Hills, Peñablanca, Cagayan 3502 Philippines
Telefax No: (+63) (078) 304-1010
Website: www.isap.edu.ph E-Mail Address: adminoffice@isap.edu.ph

C OLLEGE OF B USINESS E DUCATION AND M ANAGEMENT

ACCOUNTANCY DEPARTMENT

30. Which of the following is not a distinctive characteristic of advanced IT systems? 

A. Data communication.
B. Integrated database.
C. Batch processing of transactions.
D. Distributive data processing.

“Do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your
requests be made known to God. And the peace of God, which surpasses all understanding, will guard your
hearts and your minds in Christ Jesus.”
(Philippians 4:6-7)

~End of Examination~

Prepared by: Checked by:

MICHAEL PATRICK A. PINEDA ROMAR A. PIGA, CPA

Instructor Program Coordinator

Reviewed by: Approved by:

CB RONIE E. SUGAROL, MPBM WINNIE T. CANCEJO, RRT, MPH

College Dean OIC, Vice President for Academic Affairs

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