CAATs Quiz Questions & Answers

CAATs Quiz Questions & Answers Name one of the keys to effective employment of Tests of Controls (ToC) that IT auditors need to know and understand. - ANS - : There is a high potential benefit to use toc when an autom ...

CAATs Quiz Questions & Answers Name one of the keys to effective employment of Tests of Controls (ToC) that IT auditors need to know and understand. - ANS - : There is a high potential benefit to use toc when an automated control exists The it auditor must have sufficient assurance of the effectiveness of it general controls Risk-based standards require that the relevant it controls were designed properly and implemented Name one of the main contributions an IT Auditor can make to a Financial Audit. - ANS - : Tests of controls Use of caatts Substantive it-related procedures Value-add management comments Integrated audit Name one of the main reasons that CAATTs are being used throughout the IT Audit industry. - ANS - : To assist internal auditors in their search for irregularities in data files To help internal auditing departments with more detailed analysis To support the forensic accountant with extrapolating large amounts of data for further analysis and fraud detection Name one of the application controls over computer based accounting systems. - ANS - : Input Processing Output Master file controls Name one of the specific input validation checks listed in the article: SPECIFIC ASPECTS OF AUDITING IN A COMPUTER-BASED ENVIRONMENT - ANS - : Format checks Range checks Compatibility checks Validity checks Exception checks Sequence checks Control totals Check digit verification Name a factor that the extent to which an auditor chooses between CAATS and manual techniques depends on. - ANS - : Practicality of carrying out manual testing Cost effectiveness of using CAATs Availability of audit time Availability of audit client's computer facility Level of audit experience and expertise in using a specified CAAT Extent to which the external auditor can rely on the internal audit's CAATs Name one of the factors that go into the effective and efficient use of CAATTs. - ANS - : Technology issues Social/personal issues Choosing the right caatt Defining the data to extract Making sure audit objectives drive the use Name one of the common file formats used to import data. - ANS - : Dbase pdf xml delimited text odbc excel Name an area that auditors are likely to focus on because of susceptibility to fraud and error. - ANS - : Revenue recognition Journal entries Accruals Reserves Name an example of CAATTs software. - ANS - : acl idea excel access activedata Name one of the predefined queries in a CAATT tool that perform scans for unusual items. - ANS - : Duplicate entries Entries posted on unusual dates Entries with unusual amounts Amounts ending in 999 Large or rounded amounts Journal entries posted to certain accounts Journal entries by source code Journal entries by person Name an analyses that CAATTs could perform on the entire accounts receivable balance details. - ANS - : Duplicate invoices or credits Customers with balances greater than approved credit lines Overdue balances with amounts greater than a certain amount Aging by invoice date or due date Balances, include significant credit memos Name one of the key principles in the fraud risk management process - ANS - : Should be in place, including a written policy Fraud risk exposure should be assessed periodically Fraud prevention techniques should be established Fraud detection techniques should be established Reporting process should be in place to solicit input on fraud Name one of the key elements that would be documented in a fraud risk assessment. - ANS - : Types of fraud that may occur Inherent risk of fraud Adequacy of existing anti-fraud programs, monitoring, and preventive controls Potential gaps in the organization's fraud controls Likelihood of a significant fraud event occurring Business impact/significance of a fraud event Name a common use of Generalized Audit Software. - ANS - : Footing and balancing entire files or selected data items Selecting and reporting detailed data contained in files Selecting stratified statistical samples from data files