Processing controls are a category of application controls
|
Show Chapter 12 Multiple-Choice Questions 1. easy IT has several significant effects on an organization. Which of the following would not be important from an auditing perspective? da.Organizational changes. b.The visibility of information. c.The potential for material misstatement. d.None of the above; i.e., they are all important. 2. easy The audit procedure which is least useful in gathering evidence on significant computer processes is: ba.documentation. b.observation. c.test decks. d.generalized audit software. 3.Which of the following is not a benefit of using IT-based controls? easya.Ability to process large volumes of transactions. db.Ability to replace manual controls with computer-based controls. c.Reduction in misstatements due to consistent processing of transactions. d.Over-reliance on computer-generated reports. 4. easy One significant risk related to an automated environment is that auditors may ____ information provided by an information system. ba.not place enough reliance on b.place too much reliance on c.reveal d.not understand 5.Which of the following is not a risk specific to IT environments? easya.Reliance on the functioning capabilities of hardware and software. bb.Increased human involvement. c.Loss of data due to insufficient backup. d.Reduced segregation of duties. 6. easy Which of the following is not an enhancement to internal control that will occur as a consequence of increased reliance on IT? da.Computer controls replace manual controls. b.Higher quality information is available. c.Computer-based controls provide opportunities to enhance separation of duties. d.Manual controls replace automated controls. 7.Which of the following is not a risk to IT systems? easya.Need for IT experienced staff cb.Separation of IT duties from accounting functions c.Improved audit trail d.Hardware and data vulnerability 8.Which of the following is not a category of an application control? easya.Processing controls. c b.Output controls. c.Hardware controls. Arens/Elder/Beasley What is processing control in application control?Processing controls are there to ensure that the incoming data is processed according to established rules for how particular data is to be processed through the application. Some of these processing controls include run-to-run totals, limit checks, and reasonableness verification of calculated amounts.
What are the four categories of application controls?Application controls include both automated and manual procedures that ensure that only authorized data are completely and accurately processed by that application. Application controls can be classified as (1) input controls, (2) processing controls, and (3) output controls.
What are the categories of processing controls?Processing Controls
Procedures of processing controls are sequence checks, control totals as run-to-run controls, physical file identification and programmed controls.
What are the application controls?Application control, a system designed to uniquely identify traffic from various applications on a network, enables an organization to define and apply extremely granular security and network routing policies based upon the source of a particular traffic flow.
|
