REVENUE ACCOUNTING SYSTEM

1. The source document for shipment in the revenue accounting cycle is:

A. Sales Journal
B. Bill of lading
C. Sales invoice
D. Remittance advice
2. Which of the following is not a source document in the revenue accounting system?
A. Bill of lading
B. Sales invoice
C. Remittance advice
D. Receiving Report
3. What is the best way to avoid sales to customers with poor credit?
A. Reconcile batch totals to detect posting errors
B. Regular review of sales forecast
C. Follow proper authorization procedures for all credit sales
D. Automatic look up of reference data like customer’s address
4. In the revenue cycle, a well-designed system should provide adequate controls to ensure:
A. All transactions are properly authorized
B. All recorded transactions are valid
C. All valid authorized transactions are recorded.
D. All of the above.

5. I. The final activity in the revenue cycle is purchasing.

II. Sales order entry is performed by the collection department.

A. Both statements are true

B. Both statements are false
C. Statement 1 is true; Statement 2 is false
D. Statement 1 is false; Statement 2 is true

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 DISBURSEMENT ACCOUNTING SYSTEM

1. The threat of inaccurate inventory records can be mitigated by which of the following controls?
A. Bar coding or RFID tags
B. Review of purchase orders
C. Verification of invoice accuracy
D. Supplier audits
E. None of the above.
2. Which one of the following departments does not receive a copy of purchase order?
A. General ledger
B. The receiving department
C. Accounts payable
D. The purchasing department
3. Which of the following expenditure cycle tasks should not be separated?
A. Purchasing inventory items and updating inventory subsidiary ledger
B. Receiving inventory items and updating inventory subsidiary ledger
C. Storing inventory in the warehouse and updating inventory subsidiary ledger
D. Updating accounts payable records and posting to the cash disbursements journal
E. All the above should be separated
4. For a retail business, a delivery of inventory, from a vendor (with whom there is an established
credit relationship) would be initially recorded in which type of accounting record as part of which
transaction cycle?
A. Purchases journal; expenditure cycle
B. General journal; expenditure cycle
C. General ledger; expenditure cycle
D. Cash disbursements journal; production cycle
5. What are the typical expenditure cycle functions?
A. Verify the accuracy of vendor invoices
B. Select the appropriate vendors from whom to order
C. Decide if appropriate discounts have been taken
D. Monitor cash flow needed to pay obligations
E. All of the above.

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 ONLINE REAL TIME

1. What includes in real time accounting?

A. General journal
B. Receipts bank reconciliation
C. Inventory
D. All of the above
2. When can online real-time accounting be used or applied?
A. For financial statement
B. To check shopping bill
C. Stock market update
D. When transactions are posted as and when they occur
3. What is not considered a benefits of online real time accounting
A. Provides financial reporting
B. Cash flow and other financial information will be supplied in months
C. Minimizing development cost
D. Saving time
4. I. In real time accounting cash flows and other financial information will be supplies in months.
II. Saving time and minimizing development cost is part of traditional accounting.
A. I is true
B. II is true
C. Both are false
D. Both are true
5. I. Real time accounting creates better cash flow management.
II. You can have more peace of mind with real time accounting.
A. I is True
B. II is true
C. Both are false
D. Both are true

3
 BATCH PROCESSING

1. Benefits of batch processing

A. It allows the system to use different priorities for interactive and non interactive work
B. It can shift the time of job processing to when the computing resources are less busy
C. Both A and B
D. None of the above
2. Which of the following are examples of batch processing?
A. Transactions, reporting, integration, research, and billing
B. Transactions, data gathering, integration, research, and billing
C. Transactions, reporting, analyzing, research, and billing
D. Transactions, reporting, analyzing, billing, and payment
3. All are examples of batch processing except:
A. Check clearing
B. Reservation system (e.g.hotel and restaurant transactions)
C. Generation of bills
D. Credit card transactions
4. All are disadvantage of a batch processing except
A. Man transactions are completed at one time in a single process
B. Data is processed immediately
C. Computer systems must be trained to apply and work out the batch system process
D. Batch systems in some circumstances are costly
5. All are example of batch processing except:
A. Credit card process billing
B. Payrolls of employees
C. A manufacturer produces a daily operational report for a production line that is run in a
batch window and delivered to managers in the early morning
D. Calculating tuition of students and teachers

4
 GENERAL CONTROLS

1. In an online computer-based system, which of the following may be used to ensure that users
have proper authorization to perform task?
A. Check digit
B. Passwords
C. Control totals
D. Limit test
2. _______ is to assure the continuity of the operation in the event of physical disaster.
A. Back-up files
B. System development and Documentation
C. Data and other procedural controls
D. A and D
3. The one who design and develop new systems by choosing and configuring hardware and
software?
A. System analyst
B. Programmer
C. Computer operator
D. Librarian
4. General control that detect and control errors arising from the use of equipment?
A. Equipment controls
B. Hardware controls
C. System controls
D. A and B
5. Which of the following terms best describes the type of control evidenced by personal
identification number or password? It must be private to restrict access.
A. System development control
B. Hardware control
C. Access control
D. Application control

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 APPLICATION CONTROLS

1. For control purposes, data clerks total up the employee Social Security numbers in each batch of
payroll transactions. Which of the following terms best describes the resulting total?
A. Hash total
B. Financial total
C. Parity total
D. Record count
2. A customer inadvertently orders part number 1234-8 instead of 1243-8. Which of the following
controls would detect this error during processing?
A. Hash total
B. Financial total
C. Limit check
D. Check digit
3. _______ designed to check that processing results is valid output and that outputs are distributed
properly to users.
A. Application control
B. Input control
C. Processing control
D. Output control
4. For control purposes, data clerks total up the employee gross pay amounts in each batch of
payroll transactions. Which of the following terms best describes the resulting total?
A. Hash total
B. Financial total
C. Parity total
D. Record count
5. To avoid invalid input, a bank added extra number at the end of each account number and
subjected the new number to algorithm. This technique is known as?
A. Dual read
B. Test for reasonableness
C. Check digit
D. Occurrence correction

6
 AUDITING AROUND THE COMPUTER

1. Auditing around the computer is also known as?

A. Black Box Audit Approach
B. White Box Audit Approach
C. Blue Box Audit Approach
D. Grey Box Audit Approach
2. Which of the following is not the definition of Auditing around the computer?
A. The auditor ignores computer processing.
B. It implies that the auditor makes use of the computer in carrying out of his audit.
C. It involves extensive testing of the inputs and outputs of the EDP system and little or no
testing of processing or computer hardware.
D. The computer is treated as the black box.
3. The following are the disadvantages of Auditing around the computer except:
A. Input data goes through many changes and true comparisons are limited.
B. Highly skilled personnel required.
C. It is tedious and time consuming.
D. Auditors does not use computer as a tool to help in auditing.
4. Which of the following statement is true about auditing around computer?
I. Forming an audit opinion through examining inputs and outputs of application.
II. Forming an audit opinion by examining the processing logic, and controls used by the
application, and by and by limited testing of the inputs and outputs.
A. Statement I
B. Statement I and II
C. Statement II
D. None of the above
5. When would auditing around computer be appropriate?
A. When controls over the computer is system is strong.
B. When controls over the computer system are non-existent.
C. When controls over the computer system are adequate.
D. It is never appropriate to audit around the computer.

7
 AUDITING THROUGH THE COMPUTER

1. Auditing through the computer is also known as?

A. Black Box Audit Approach
B. White Box Audit Approach
C. Blue Box Audit Approach
D. Grey Box Audit Approach
2. Which of the following is not the definition of Auditing through the computer?
A. In this approach, computer is treated as a white box.
B. Computer assisted techniques.
C. It implies that the auditor makes use of the computer in carrying out of his audit.
D. It involves extensive testing of the inputs and outputs of the EDP system and little or no
testing of processing or computer hardware.
3. Which of the following is not a common type of white box approach?
A. Test data
B. Integrated test facility
C. Parallel simulation
D. Version check
4. Which of the following statement is true about auditing through the computer?
I. More likely to be utilized when the client’s computerized processing system relatively
simple.
II. It is primarily concerned with correspondence between input and output.
A. Statement I
B. Statement II
C. Statement I and II
D. None of the above
5. 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.

8
 TEST DATA

1. An IS auditor is conducting substantive audit tests of a new accounts receivable module. The IS
auditor has a tight schedule and limited computer expertise. Which would be the BEST audit
technique to use in this situation?
A. Test data
B. Parallel simulation
C. Integrated test facility
D. Embedded audit module
2. When an auditor tests the internal controls of a computerized accounting system, which of the
following is true of the test data approach?
A. Test data programs need not to be tailor-made by the auditor for each client’s computer
applications.
B. Test data programs usually consist of all possible valid and invalid conditions regarding
compliance with internal controls.
C. Test data are coded to dummy subsidiary, so they can be extracted from the system
under actual operating conditions.
D. Test data are processed with the client’s computer and the results are compared with the
auditors predetermined results.
3. What method is used to establish application integrity by processing specially prepared sets of
input data through production applications that are under review?
A. White box approach
B. Test data method
C. Black box approach
D. All the above
4. The __________ procedure for auditing computer process controls uses a hypothetical series of
valid and invalid transactions.
A. Concurrent audit techniques
B. Test data processing
C. Integrated test facility
D. Dual process
5. The auditor's objective in determining whether the client's computer program correctly processes
valid and invalid transactions is accomplished through the
A. Test data approach.
B. Generalized audit software approach.

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C. Microcomputer-aided auditing approach.
D. Generally accepted auditing standards.

10
 PARALLEL SIMULATION

1. 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.
2. Consider the following statements:
Statement A
Parallel simulation is the generation an independent programme to stimulate/imitate part of
an existing application programme, and is designed to test the validity and verify the accuracy
of an existing application programme/cluster of application programmes
Statement B
Computer assisted audit techniques (CAATs) can be defined as any single, any group
and/or, any cluster of audit techniques that use information technology-based applications as
a primary investigative tool.
Which of the following combinations is correct?
A. Statement A is False, and Statement B is True
B. Statement A is False, and Statement B is False
C. Statement A is True, and Statement B is False
D. Statement A is True, and Statement B is True
3. Parallel simulation programs used by the auditors for testing programs:
A. Must simulate all functions of the production computer-application system.
B. Cannot be developed with the aid of generalized audit software.
C. Can use live data or test data.
D. Is generally restricted to data base environments.

4. Which of the following is a computer-assisted audit technique that permits an auditor to insert the
auditor’s version of client’s program to process data and compare the output with the client’s
output?
A. Test data module
B. Frame relay protocol
C. Remote node router
D. Parallel simulation
5. Old and new systems operating simultaneously in all locations is a test approach known as:

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A. Pilot testing
B. Horizontal testing
C. Integrative testing
D. Parallel testing

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 INTEGRATED FACILTIES

1. Which of the following is a benefit of an integrated test facility?

A. It uses actual master files or dummies and the IS auditor does not need to assess the
source of the transaction.
B. Periodic testing does not require separate test processes.
C. It affirms application systems and tests the ongoing operation of the system.
D. The requirement to prepare test data is limited.
2. When using an integrated test facility (ITF), an IS auditor should ensure that

A. Production data are used for testing.

B. Test data are isolated from production data.
C. A test data generator is used.
D. Master files are updated with the test data.
3. An integrated test facility is considered a useful audit tool because it
A. Is a cost-efficient approach to auditing application controls.
B. Enables the financial and IS auditors to integrate their audit tests.
C. Compares processing output with independently calculated data.
D. Provides the IS auditor with a toll to analyze a large range of information.
4. Whether or not a real time program contains adequate controls is most effectively determined
using
A. Audit software
B. An integrated test facility
C. A tracing routine
D. A traditional test deck
5. What is the disadvantage of integrated test facility (ITF)

A. Potential for corrupting the data files of the organization with test data.
B. Periodic testing does not require separate test processes.
C. Supports ongoing monitoring of control.
D. None of the above

13
 NETWORK

1. What is internet?
A. A single network
B. A vast collection of different networks
C. Interconnection of local area networks
D. None of the above
2. To join the internet, the computer has to be connected to a

A. Internet architecture board

B. Internet society
C. Internet service provider
D. None of the above
3. What is the access point (AP) in wireless LAN?

A. Device that allows wireless devices to connect to a wired network

B. Wireless devices itself
C. Both A and B
D. None of the above
4. Ethernet frame consists of

A. MAC address
B. IP address
C. Both A and B
D. None of the above
5. Internet works on

A. Packet switching
B. Circuit switching
C. Both A and B
D. None of the above

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 STAR TOPOLOGY

1. Star topology is used in

A. LAN
B. WAN
C. MAN
D. Internetwork
2. Star topology is less expensive than
A. Mesh
B. Ring
C. Bus
D. Hybrid
3. In Star topology, central controller is called
A. Node
B. Router
C. Hub
D. Modem
4. Topology which takes more cable than e.g. a bus, but benefit is that if a cable fails, only one node
will be brought down is
A. Bus Topology
B. Star Topology
C. Ring Topology
D. Mesh Topology
5. If a computer in a star network fails, the network will:
A. Still work unaffected
B. Work with limited capabilities
C. Cease to function
D. None of the above

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 RING TOPOLOGY

1. Flow of data in a computer ring network topology is

A. Unidirectional
B. Bi directional
C. Simplex
D. Duplex
2. In a ________ topology, hosts are connected in a physical ring or circle
A. Star
B. Bus
C. Ring
D. Mesh
3. What topology uses token passing?
A. Star
B. Square
C. Bus
D. Ring
4. Select the most basic topology
A. Star
B. Bus
C. Mesh
D. Ring
5. What are 2 advantages of a ring topology?
A. Ring networks are moderately easy to install.
B. A single break in the cable can disrupt the entire network.
C. Cable faults are easily located, making troubleshooting easier.
D. Expansion to the network can cause network disruption.

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 TREE TOPOLOGY

1. A special type of structure in which many connected elements are like the branches of a tree.
A. Star
B. Tree
C. Mesh
D. None of the above
2. Topology that combines characteristics of linear bus and star topologies.
A. Mesh
B. Star
C. Ring
D. Tree
3. What is an advantage of tree topology?
A. Scalability of the network depends on the type of cable used
B. Each computer has equal access to resources
C. Error detection and correction is easy
D. None of the above
4. What are the disadvantages of tree topology?
A. Scalability of the network depends on the type of cable used
B. As more and more nodes and segments are added, the maintenance becomes difficult.
C. Expansion of networks is easy and possible.
D. All of the above.
5. Tree topology is known as a?
A. Mesh Bus topology
B. Ring Star topology
C. Star Bus topology
D. Ring Bus Topology

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 BUS TOPOLOGY
1. This topology requires multipoint connection.
A. Star
B. Mesh
C. Ring
D. Bus
2. Which type of cable are you most likely to find on networks that use bus topology?
A. UTP cable
B. STP cable
C. Coaxial cable
D. Fiber-optic cable
3. Bus, ring and star topologies are mostly used in the?
A. Internetwork
B. MAN
C. WAN
D. LAN
4. Security and privacy are less in a _______ topology.
A. Internetwork
B. MAN
C. WAN
D. LAN
5. Terminators are used in ______ topology.
A. Bus
B. Star
C. Tree
D. Mesh

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 MESH TOPOLOGY

1. In mesh topology, devices are connected via

A. Multipoint link
B. Point to point link
C. No Link
D. None of above
2. The topology with highest reliability is?
A. Bus topology
B. Star topology
C. Ring Topology
D. Mesh Topology
3. Which of the following advantages does a partial mesh topology provide?
A. All nodes have multiple connections to the network.
B. At least some nodes have multiple connections to the network.
C. Any node can be taken down without affecting network performance.
D. Network performance will be similar, no matter what kind of link is used between nodes.
4. Which of the following is the most fault-tolerant WAN topology?
A. Partial-mesh
B. Full-mesh
C. Ring
D. Bus
5. What would happen to the entire network if one of the nodes in a full-mesh WAN failed?
A. Performance for all locations on the WAN would suffer.
B. The failed location would be unable to transmit or receive data, but other locations could
communicate without a problem.
C. Data would no longer be transmitted to or from any of the locations.
D. The failed location would broadcast errors to every other location.

19
 E-BUSINESS

1. Whic
h of the following is the most realistic relationship between e-commerce and e-business?
A. E-Commerce is a different name for E-Business
B. E-Commerce is a subset of E-Business
C. E-Commerce has no overlap with E-Business
D. E-Business is a subset of E-Commerce
2. E-
Business requires:
A. Accessibility to networks
B. Accessibility to computers
C. Access to markets
D. All of the above
3. The planning process for E-business includes:
A. Deciding about the gateway
B. Deciding about the products and services you want to sell
C. Deciding about the customer
D. Deciding about the security parameters
4. A credit card contains cash
A. True
B. False
C. Only if not overdue
D. Even if card is overdue
5. Entrepreneurs can easily start off with new E-business ventures because
A. Cost is low
B. Availability of mass markets
C. None of the above
D. All of the above

20
 E-COMMERCE

1. Which segment does eBay, Amazon.com, and Lazada belong to?

A. B2Bs
B. B2Cs
C. C2Bs
D. C2Cs
2. The term “E-commerce” includes:
A. Electronic trading of Physical goods and intangibles such as information.
B. The electronic provision of services such as after sales support or online legal device
C. All the steps involved in trade, such as on-line marketing ordering payment and support
for delivery.
D. All of the above
3. Which of the following are the forms of E-banking?
I. Internet Banking II. Telephone Banking
II. Electronic Check conversion IV. Electronic Bill Payment
V. Direct Deposit
A. I, II, III and IV only
B. II, III, IV and V only
C. I, III, IV and V only
D. I, II, III, IV and V
4. How many common types of E-commerce applications are available in the IT industry?
A. 3
B. 4
C. 5
D. 6
5. In the E-commerce security environment, which of the following constitutes the inner-most layer?
A. People
B. Data
C. Technology solutions
D. Organizational policies and procedures

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 ANSWERS/EXPLANATIONS:

REVENUE ACCOUNTING SYSTEM - ANSWERS

1. B. Bill of lading
SALES JOURNAL is an accounting record; not a source document.
SALES INVOICE is a source document for BILLING while REMITTANCE ADVICE is a source
document for REMITTANCE

2. D. Receiving Report
Receiving report is a source document in the Disbursement accounting system, specifically in the
receiving activity.

3. C. Follow proper authorization procedures for all credit sales

In order to avoid sales to customers with poor credit, a credit manager should approve credit
sales and follow proper authorization procedures for all credit sales.

4. D. All of the above

All of the following choices are ensured if a well-designed system provides adequate controls.
Therefore, the answer is all of the above.

5. B. Both are false

Purchasing is part of the disbursement accounting cycle. The final activity in the revenue
accounting cycle is cash collection.
Sales order entry is performed by the sales department.

22
DISBURSEMENT ACCOUNTING SYSTEM – ANSWERS

1. A. Bar coding or RFID tags

Barcode systems are used to automate data collection where hand recording is neither timely or
cost effective. Barcode inventory management system can help you increase efficiency and save
time and money.

2. A. General ledger
General ledger does not receive the copy of purchase order. It is a company’s main account. It
records all transaction occurred. It can give an overview of assets, liabilities, revenue and
expenditure and does not require a copy of purchase order.

3. D. Updating accounts payable records and posting to the cash disbursements journal
Preparation of the check register is done by the AP clerk. When the supplier's invoice comes the
data is entered into the system and a record is added by system to the vendor's invoice file. The
AP packet is created automatically, and the three-way check is also done automatically. but still
after the payment date is set in the system the AP clerk needs to prepare the check register and
a separate person is required to sign the checks

4. A. Purchase journal; expenditure cycle

When a businessman places an order for goods that he needs, the seller of the goods makes out
an invoice. The top copy (first copy) of this invoice is received by the purchaser and is recorded in
the purchases journal.
The expenditure cycle follows a purchase from the decision to buy through the final payment.

5. E. All of the above

An expenditure cycle is a set of purchasing decisions and actions. It's the repetitive process of
creating purchase orders and ordering goods and services, receiving these items, approving the
invoices for these items and services, and paying the invoices.
The expenditure cycle follows a purchase from the decision to buy through the final payment.
Shoppers use the expenditure cycle every time they make a purchase: They decide they need to
purchase product and compare pricing and suppliers; next, they make a purchase and choose a
method of payment.

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ONLINE REAL TIME – ANSWERS

1. D. All of the above

These are related transactions that are included in an online real time accounting system.

2. D. When transactions are posted as and when they occur.

Online real time is applied when transactions are posted and if it occurs.

3. B. Cash flow and other financial information will be supplied in months

Information such as statement of cash flows and statement of financial position in online real time
only takes days for it to be done.

4. C. Both are false

Real time accounting saves time and minimizing development cost, while traditional accounting
takes months for it to supply cash flow and other financial information.

5. D. Both are true

These two are part of real time accounting benefits.

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BATCH PROCESSING – ANSWERS

1. C. Both A and B
Batch process is the processing of transactions in a group or batch, this is one of the benefits of
batch processing.

2. A. Transactions, reporting, integration, research, and billing

Batch processing allows capital investment in computing hardware to be fully utilized and for
limited processing powers to be reserved for highly priority task during business hours. These 5
are the illustrative examples of batch processing

3. B. Reservation system
Reservation system does not need batch processing.

4. A. Man transactions are completed at one time in a single process

Batch process is a group processing system and it does not involve one at a time transaction.

5. D. Calculating the tuition of students and teachers.

It is not an example of batch processing because tuitions are recorded per student and not by
group.

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GENERAL CONTROLS – ANSWERS

1. B. Password
Access controls is a way of limiting access to a system or to physical or virtual resources to
ensure that users have proper authorization to perform a task.

2. D. A and D
Data and other procedural controls also known as “back-up files” assures the continuity of the
operation in the event of any physical disaster.

3. A. System analyst
System analyst set up new computer systems, both the hardware and software add new software
applications to increase computer productivity.

4. D. A and B
Hardware controls or Equipment controls are computer controls built into physical equipment by
the manufacturer to detect and control errors arising from the use of equipment.

5. C. Access control
Access control would only cover access approval, authentication and access control are often
combined into a single operation, authentication methods and tokens include passwords,
personal identification numbers and etc.

26
APPLICATION CONTROLS – ANSWERS

1. A. Hash total
The sum of unrelated numbers. The hash total does not provide useful data, but is used as a
check to ensure inputs were entered correctly.

2. D. Check digit
Number added to a code to derive a further number as a means of verifying the accuracy or
validity of the code as it is printed or transmitted. Single digit placed consistently in any position.

3. D. Output control
The output controls describes the immediate results of the process. Compare output results with
expected results by checking the output against the input.

4. B. Hardware controls
Financial total is normally used in batch processing method. Financial data consists of pieces or
sets of information related to the financial health of the business.

5. C. Check digit
Single digit placed consistently in any position. Number added to a code to derive a further
number as a means of verifying the accuracy or validity of the code as it is printed or transmitted.

27
AUDITING AROUND THE COMPUTER – ANSWERS

1. A. Black Box Audit Approach

It is conducting audit without the use of computer system, same as Auditing around the computer.

2. B. It implies that the auditor makes use of the computer in carrying out of his audit.
It is the definition of auditing through the computer. Auditing around computer is auditing without
the use of computer it is a manual basis.

3. B. Highly skilled personnel.

It is the disadvantage of auditing through the computer because unlike in the auditing around the
computer you don’t need to be highly skilled, as long as you know the principle of auditing you
can work well.

4. A. Statement II
It is about Auditing through the computer.

5. B. When controls over computer system are non-existent.

Auditing around computer is auditing without the use of computer.

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AUDITING THROUGH THE COMPUTER – ANSWERS

1. B. White Box Audit Approach

It is considered as the audit trail and auditing the process followed by the computer system.

2. D. It involves extensive testing of the inputs and outputs of the EDP system and little or no
testing of processing or computer hardware.
It is the definition of Auditing around the computer.

3. D. Version Check
Test data is one of the white box techniques used by auditors in a computer assisted auditing
techniques.
Integrated test facility creates a fictitious entity in a database to process test transaction
simultaneously with live input.
Parallel simulation it involves the auditor writing a computer program the replicates some part of a
client data through an auditor’s generalized audit software program.

4. D. None of the above

Statement I and II is about auditing around the computer.

5. C. Procedures contained within the program.

Test data is data created by auditors to run through the client’s system testing audit procedures
contained within the program (also referred to as programmed controls). Best test data is not the
client’s data, but data created by the auditors, procedure run on test data do not reflect the
accuracy or validity of the client’s data. If it is not the client’s data, there is no reason to assess
the normalcy of test data.

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TEST DATA – ANSWERS

1. A. Test Data
A Test data uses a set of hypothetical transactions to verify the program logic and internal control
in short time and for an auditor with minimal IT background.

2. D. Test data are processed with the client’s computer and the results are compared
with the auditor’s predetermined results
Choice “D” is correct. The test data approach refers to a technique in which the client’s application
program is used to process a set of test data, the results of which are already known.

3. B. Test data method

The test data method is well suited to tests of controls in batch systems. The batch of test data
can be processed as a single batch so that it will not interrupt or interfere with regular batch
processing. The batch nature of the test data approach makes it is a static approach to testing
controls.

4. B. Test data processing

Test data processing is a technique used to examine the integrity of the computer processing
controls. It involves the creation of a series of hypothetical valid and invalid transactions and the
introduction of those transactions into the system. The invalid data may include records with
missing data, fields containing unreasonably large amounts, invalid account numbers, etc. if the
program controls are working, then all invalid transactions should be rejected. Valid transactions
should all be properly processed.

5. A. Test Data Approach

The test data approach involves processing the auditor’s test data using the client’s computer
system and the client’s application software program to determine whether the computer-
performed controls correctly process the test data. Because the auditor designs the test data, the
auditor can identify which test items should be accepted or rejected by the computer.

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PARALLEL SIMULATION - ANSWERS

1. A. Parallel simulation
The parallel simulation uses generalized audit programs that processes data and generates
output like the original audited program.

2. D. Statement A is true, and statement B is true

Involves the auditor writing a computer program that replicates some part of a client’s
application system, processes actual client data through an auditor’s generalized audit
software program and compares the output obtained with output obtained from the client. The
method verifies processing of actual transactions and allows the auditor to verify actual client
results. Parallel simulation
CAATs is the practice of using computers to automate the accounting and audit processes.
CAATs normally includes using basic office productivity software such as spreadsheet, word
processors and text editing programs and more advanced software packages involves use
statistical analysis and business intelligence tools.

3. C. Can use live data or test data

Auditor reprocesses some or all the client's live data (using software provided by the auditor)
and then compares the results with the client's files.

4. D. Parallel Simulation
Parallel simulation is the computer-assisted audit technique in which the auditor inserts the
auditor’s version of the client’s program to reprocess client data compare the output with the
client’s output.

5. D. Parallel Testing
Parallel testing means testing multiple applications or subcomponents of one application
concurrently to reduce the test time. However, distributed testing also presupposes that test
parts interact with each other during the test run, while the parallel testing approach lacks
interaction between test parts.

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INTEGRATED FACILITIES - ANSWERS

1. B. Periodic testing does not require separate test processes.

An ITF creates a fictitious entity in the database to process test transactions simultaneously with live
input. Its advantage is that periodic testing does not require separate test processes. However,
careful planning is necessary, and test data must be isolated form production data.

2. B. Test data are isolated from production data.

An IS auditor is not required to use production data or a test data generator, production master files
should not be updated with test data.

3. C. Compares processing output with independently calculated data.

An ITF is considered a useful audit tool because it uses the same programs to compare processing
using independently calculated data. This involves setting up dummy entities on an application
system and processing test or production data against the entity as a means of verifying processing
accuracy.

4. B. An integrated test facility

An integrated test facility is normally used to audit large computer systems that use real-time
processing.

5. A. Potential for corrupting the data files of the organization with test data.

The potential of corrupting data files with test data that may end up in the financial reporting process.

NETWORKS – ANSWERS

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1. B. A vast collection of different networks
It connects millions of computers together globally, forming a network in which any computer can
communicate with any other computer as long as they are both connected to the internet.

2. C. Internet service provider

Internet service provider is an organization that provides access to the internet.

3. A. Device that allows wireless devices to connect to a wired network

Access point (AP) is a networking hardware device that allows a Wi-Fi device to connect to a
wired network.

4. A. MAC address
Ethernet frame starts with an Ethernet header, which contains destination and source MAC
addresses as its first two fields

5. A. Packet switching
It features delivery of packets of data between devices over a shared network.

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STAR TOPOLOGY - ANSWERS

1. A. LAN
A star topology is a topology for a Local Area Network (LAN) in which all nodes are individually
connected to a central connection point, like a hub or a switch. A star takes more cable than e.g.
a bus, but the benefit is that if a cable fails, only one node will be brought down.

2. A. Mesh
In a star, each device needs only one link and one I/O port to connect it to any number of others.
This factor also makes it easy to install and reconfigure. Far less cabling needs to be house, and
additions, moves, and deletions involve only one connection: between device and the hub.

3. C. Hub
In star topology, every host is connected to a central hub. A star network is an implementation of
a spoke–hub distribution paradigm in computer networks.

4. B. Star topology
In Star topology, all the components of network are connected to the central device called “hub”
which may be a hub, a router or a switch. Unlike Bus topology where nodes were connected to
central cable, here all the workstations are connected to central device with a point-to-point
connection. So, it can be said that every computer is indirectly connected to every other node by
the help of “hub

5. A. Still work unaffected

The star topology is the most reliable because the failure of a node or a node cable does not
affect other nodes.

RING TOPOLOGY- ANSWERS

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 1. A. Unidirectional
Rings can be unidirectional, with all traffic travelling either clockwise or anticlockwise around the
ring, or bidirectional. Because a unidirectional ring topology provides only one pathway between
any two nodes, unidirectional ring networks may be disrupted by the failure of a single link.

2. C. Ring
The ring topology has no beginning or end, the cable does not need to be terminated.

3. D. Ring
It uses a special three-byte frame called a "token" that travels around a logical "ring" of
workstations or servers. This token passing is a channel access method providing fair access for
all stations, and eliminating the collisions of contention-based access methods.

4. D. Ring
It is the most basic topology because in a ring topology network computer are connected by a
single loop of cable, the data signals travel around the loop in one direction, passing through
each computer.

5. D. Both A and C
B is a disadvantage of ring topology

TREE TOPOLOGY – ANSWERS

1. B.
Tree

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 A network structure in the form of a multipoint electrical circuit, with multiple branches off the trunk of
the central, or root, bus.

1. D.
Tree
A tree topology includes multiple star topologies, which involve a variety of single nodes connected to
a central node. Multiple stars involve either a series or tertiary nodes attached to two or more
secondary nodes, which are attached to the tree's primary trunk node.

2. C.
Error detection and correction is easy
Error detection is easy for the users because everyone would be able to notice one small error for
every information that is given throughout the users. The users will easily correct every wrong
information.

3. A.
Scalability of the network depends on the type of cable used
If the users will not use a proper cable, the function of the network would differ and it would not be at
maximum potential, it would also be hard for the users to work efficiently and properly.

4. C.
Star Bus topology
In computer networks, a tree topology is also known as a star bus topology. It incorporates elements
of both a bus topology and a star topology. if the main cable or trunk between each of the two star
topology networks were to fail, those networks would be unable to communicate with each other.
However, computers on the same star topology would still be able to communicate.

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BUS TOPOLOGY – ANSWERS

1. D.
Bus
Multipoint connection is used in BUS Topology. All the devices are connected to a single transmission
medium, which acts as the Backbone of the connection. This links all the devices in the network. Here
each node has its unique address.

2. A.
UTP cable
In a balanced line operation, the two wires carry equal and opposite signals, and the destination
detects the difference between the two. This is known as differential mode transmission. Noise
sources introduce signals into the wires by coupling of electric or magnetic fields and tend to couple
to both wires equally. The noise thus produces a common-mode signal which is canceled at the
receiver when the difference signal is taken.

3. D.
LAN
A bus network is an arrangement in a local area network (LAN) in which each node (workstation or
other device) is connected to a main cable or link called the bus. These topologies use LAN for they
only need a small amount of network and are only needed for smaller information.

4. A.
Bus
The security in a BUS topology is lesser because the information in this type of topology is very much
transparent with the users, it is also very accessible at any time by the users.

5. A.
Bus
The purpose of the terminator is to absorb signals so that they do not reflect back down the line.
Ethernet networks require a terminator at both ends of the bus, and SCSI chains require a single
terminator at the end of the chain.

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MESH TOPOLOGY - ANSWERS

1. B. Point to point link

Mesh topology is point-to-point connection topology where each node is connected with every
other node via cables. It is a dedicated point to point connection where the link carries traffic
between the two devices that are connected.

2. D. Mesh topology
Mess Topology is a network setup where each computer and network device are interconnected
with one another, allowing for most transmissions to be distributed, even if one of the connections
go down. This topology is not commonly used for most computer networks as it is difficult and
expensive to have redundant connection to every computer. However, this topology is commonly
used for wireless networks.

3. B. At least some nodes have multiple connections to the network.

Partial mesh, some nodes are organized in a full mesh scheme, but others are only connected to
one or two in the network.

4. B. Full- mesh
Full- Mesh topology provides fault tolerance by having separate cables for each connection,
allowing any one cable to break without interfering with the rest of the network.

5. B. The failed location would be unable to transmit or receive data, but other locations
could communicate without a problem.
A big advantage of this decentralized topology is that there cannot be a single point of failure. If
one node can no longer operate, the others can still communicate with each other, directly or
through one or more intermediate nodes.

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E – BUSINESS - ANSWERS

1. B. E-commerce is a subset of E-business

E-commerce in its basic form, it involves placing orders online and making payments online. While E
business encompasses these activities but may also involve manufacturing and logistics to name a few.

2.  D. All of the above

E business will require all the above mentioned.

3. B. Deciding about the products and services you want to sell

The gateway, customer type, and the security parameters you will need to set up will largely be
dependent on what it is you plan to sell.

4. B. False
A credit card does not contain cash, it is simply a representation of a line of credit that the owner may
use, which in effect incurs for the user debt.

5. D. All of the above

Anyone can open an e business because the costs are low, and the availability of mass markets globally
ensures that if you have a good value proposition, people will have access to your product or service.

E – COMMERCE – ANSWERS

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1. B. B2Cs
Amazon, Ebay, and Lazada are designed to sell from Businesses to the Consumers.

2. D. All of the above

All the above are terms that describe e-commerce

3. D. I, II, III, IV and V

I, II, III, IV, and V are all forms of e-banking, because these are all services offered by banks through the
internet.

4. B. 4
There are 4 general types of ecommerce, specifically:
Business to Business (B2B)
Business to Customers (B2C)
Customers to Customers (C2C)
Customers to Business (C2B)

5. B. Data
Data is what you will find in the innermost layer in a security environment because data is essentially what
you are protecting

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