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ACCOUNTANCY DEPARTMENT
COLUMBAN COLLEGE, INC
No. 1 Mt. Apo Street, East Tapinac
Olongapo City, Philippines

AY: 2018-2019, 1st Semester

QUIZ in CAATS (EDP)

Last Name:______________________________Schedule :________________________________________

First Name:______________________________Professor :________________________________________

TABLE OF SPECIFICATION (TOS)

Theories Problems Solving

Topics/Contents Knowledge & Analysis & Synthe Evalua Items
Comprehension Application sis tion
1. CAATS 20 0 0 0 20
Total 20 0 0 0 10

Distribution of the Examination Score Equiv

No. of Items
%age
Part 1. Theories-Multiple Choice 20 0 0 0 0 0 0 0 20
Part 2. Easy/Average Problems Solving - MC 0 0 0 0 0 0 0 0 0
Part 3. Difficult Problems Solving - NMC 0 0 0 0 0 0 0 0 0
Total 20 0 0 0 0 0 0 0 20

Prepared by: Noted by:

Prof. Laarni D. Bingcang, CPA Dr. Peter O. Tulio, CPA

BSA Faculty Chairperson

ANSWER SHEET
- SHADE THE LETTER OF YOUR CHOICE -
PART 1
Theories-Multiple Choice
1 [a] [b] [c] [d]
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20 [a] [b] [c] [d]

PART 1

1. An auditor is preparing test data for use in the audit of a computer based accounts receivable application. Which of
the following items would be appropriate to include as an item in the test data?
a. A transaction record which contains an incorrect master file control total.
b. A master file record which contains an invalid customer identification number.
c. A master file record which contains an incorrect master file control total.
d. A transaction record which contains an invalid customer identification number.

2. In auditing through a computer, the test data method is used by auditors to test the
a. Accuracy of input data.
b. Validity of the output.
c. Procedures contained within the program.
d. Normalcy of distribution of test data.

3. Which of the following is an advantage of generalized computer audit packages?

a. They are all written in one identical computer language.
b. They can be used for audits of clients that use differing CBIS equipment and file formats.
c. They have reduced the need for the auditor to study input controls for CBIS related procedures.
d. Their use can be substituted for a relatively large part of the required control testing.

4. Processing simulated file data provides the auditor with information about the reliability of controls from evidence
that exists in simulated files. One of the techniques involved in this approach makes use of
a. Controlled reprocessing.
b. Program code checking.
c. Printout reviews.
d. Integrated test facility.

5. An integrated test facility (ITF) would be appropriate when the auditor needs to
a. Trace a complex logic path through an application system.
b. Verify processing accuracy concurrently with processing.
c. Monitor transactions in an application system continuously.
d. Verify load module integrity for production programs.

6. When auditing "around" the computer, the independent auditor focuses solely upon the source documents and
a. Test data.
b. CBIS processing.
c. Control techniques.
d. CBIS output.

7. Which of the following methods of testing application controls utilizes a generalized audit software package
prepared by the auditors?
a. Parallel simulation.
b. Integrated testing facility approach.
c. Test data approach.
d. Exception report tests.

8. Which of the following is a disadvantage of the integrated test facility approach?

a. In establishing fictitious entities, the auditor may be compromising audit independence.
b. Removing the fictitious transactions from the system is somewhat difficult and, if not done carefully, may
contaminate the client's files.
c. ITF is simply an automated version of auditing "around" the computer.
d. The auditor may not always have a current copy of the authorized version of the client's program.

9. Matthews Corp. has changed from a system of recording time worked on clock cards to a computerized payroll
system in which employees record time in and out with magnetic cards. The CBIS automatically updates all payroll
records. Because of this change
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a. A generalized computer audit program must be used.
b. Part of the audit trail is altered.
c. The potential for payroll related fraud is diminished.
d. Transactions must be processed in batches.

10. Generalized audit software is of primary interest to the auditor in terms of its capability to
a. Access information stored on computer files.
b. Select a sample of items for testing.
c. Evaluate sample test results.
d. Test the accuracy of the client's calculations.

11. When testing a computerized accounting system, which of the following is not true of the test data approach?
a. The test data need consist of only those valid and invalid conditions in which the auditor is interested.
b. Only one transaction of each type need be tested.
c. Test data are processed by the client's computer programs under the auditor's control.
d. The test data must consist of all possible valid and invalid conditions.

12. Which of the following procedures is an example of auditing "around" the computer?
a. The auditor traces adding machine tapes of sales order batch totals to a computer printout of the sales journal.
b. The auditor develops a set of hypothetical sales transactions and, using the client's computer program, enters the
transactions into the system and observes the processing flow.
c. The auditor enters hypothetical transactions into the client's processing system during client processing of live" data.
d. The auditor observes client personnel as they process the biweekly payroll. The auditor is primarily concerned with
computer rejection of data that fails to meet reasonableness limits.

13. Which of the following is an acknowledged risk of using test data when auditing CBIS records?
a. The test data may not include all possible types of transactions.
b. The computer may not process a simulated transaction in the same way it would an identical actual transaction.
c. The method cannot be used with simulated master records.
d. Test data may be useful in verifying the correctness of account balances, but not in determining the presence
of processing controls.

14. Which of the following is not a technique for testing data processing controls?
a. The auditor develops a set of payroll test data that contain numerous errors. The auditor plans to enter these
transactions into the client's system and observe whether the computer detects and properly responds to
the error conditions.
b. The auditor utilizes the computer to randomly select customer accounts for confirmation.
c. The auditor creates a set of fictitious customer accounts and introduces hypothetical sales transactions, as well as sales
returns and allowances, simultaneously with the client's live data processing.
d. At the auditor's request, the client has modified its payroll processing program so as to separately record any weekly
payroll entry consisting of 60 hours or more. These separately recorded ("marked") entries are
locked into the system and are available only to the auditor.

15. While entering data into a cash receipts transaction file, an employee transposed two numbers in a customer code.
Which of the following controls could prevent input of this type of error?
a. Sequence check.
b. Record check.
c. Self-checking digit.
d. Field-size check.

16. The completeness of computer-generated sales figures can be tested by comparing the number of items listed on the
daily sales report with the number of items billed on the actual invoices. This process uses
a. Check digits.
b. Control totals.
c. Validity tests.
d. Process tracing data.

17. Which of the following controls would be most efficient in reducing common data input errors?
a. Keystroke verification.
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b. A set of well-designed edit checks.
c. Balancing and reconciliation.
d. Batch totals.

18. Creating simulated transactions that are processed through a system to generate results that are compared with
predetermined results, is an auditing procedure referred to as
a. Desk checking.
b. Use of test data.
c. Completing outstanding jobs.
d. Parallel simulation.

19. Which of the following is a computer test made to ascertain whether a given characteristic belongs to the group?
a. Parity check.
b. Validity check.
c. Echo check.
d. Limit check.

20. A disadvantage of auditing around the computer is that it

a. Permits no assessment of actual processing.
b. Requires highly skilled auditors.
c. Demands intensive use of machine resources.
d. Interacts actively with auditee applications.

END OF QUIZ– GODBLESS FOR THE RESULTS! 