AAS1

1st SEM

1. In the weekly computer run to prepare payroll checks, a

check was printed for an employee who had been
terminated the previous week. Which of the
following controls, if properly utilized, would
have been most effective in preventing the error
or ensuring its prompt detection?
a. A control total for hours worked, prepared from time
cards collected by the timekeeping department.
b. Requiring the treasurer's office to account for the
number of the pre-numbered checks issued to the CBIS
department for the processing of the payroll.
c. Use of a check digit for employee numbers.
d. Use of a header label for the payroll input sheet.

2. 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.

3. Unauthorized alteration of on-line records can be prevented

by employing:
a. Key verification.
b. Computer sequence checks.
c. Computer matching.
d. Data base access controls.

4. 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.
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1st SEM

5. In the preliminary survey the auditor learns that a

department has several microcomputers. Which of the
following is usually true and should be considered
in planning the audit?
a. Microcomputers, though small, are capable of processing
financial information, and physical security is a
control concern.
b. Microcomputers are limited to applications such as
worksheet generation and do not present a significant
audit risk.
c. Microcomputers are generally under the control of the
data processing department and use the same control
features.
d. Microcomputers are too small to contain any built-in
control features. Therefore, other controls must be
relied upon.

6. The primary reason for internal auditing's involvement in

the development of new computer-based sysstems is to:
a. Plan post-implementation reviews.
b. Promote adequate controls.
c. Train auditors in CBIS techniques.
d. Reduce overall audit effort.

7. 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.

8. 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.
AAS1
1st SEM

c. Printout reviews.
d. Integrated test facility.

9. Which of the following statements most likely represents a

disadvantage for an entity that keeps microcomputer-prepared
data files rather than manually prepared files?
a. It is usually more difficult to detect transposition
errors.
b. Transactions are usually authorized before they are
executed and recorded.
c. It is usually easier for unauthorized persons to access
and alter the files.
d. Random error associated with processing similar
transactions in different ways is usually greater.

10. The possibility of losing a large amount of information

stored in computer files most likely would be reduced by the
use of
a. Back-up files
b. Check digits
c. Completeness tests
d. Conversion verification.

11. 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.

12. Where computer processing is used in significant accounting

applications, internal accounting control procedures may be
defined by classifying control procedures into two types:
general and
a. Administrative.
b. Specific.
c. Application.
d. Authorization.
AAS1
1st SEM

13. The increased presence of the microcomputer in the workplace

has resulted in an increasing number of persons having
access to the computer. A control that is often used
to prevent unauthorized access to sensitive programs is:
a. Backup copies of the diskettes.
b. Passwords for each of the users.
c. Disaster-recovery procedures.
d. Record counts of the number of input transactions in a
batch being processed.

14. Checklists, systems development methodology, and staff

hiring are examples of what type of controls?
a. Detective.
b. Preventive.
c. Subjective.
d. Corrective.

15. When an on-line, real-time (OLRT) computer-based processing

system is in use, internal control can be strengthened by
a. Providing for the separation of duties between
keypunching and error listing operations.
b. Attaching plastic file protection rings to reels of
magnetic tape before new data can be entered on the
file.
c. Making a validity check of an identification number
before a user can obtain access to the computer files.
d. Preparing batch totals to provide assurance that file
updates are made for the entire input.

16. 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.
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1st SEM

17. One of the features that distinguishes computer processing

from manual processing is
a. Computer processing virtually eliminates the occurrence
of computational error normally associated with manual
processing.
b. Errors or fraud in computer processing will be
detected soon after their occurrences.
c. The potential for systematic error is ordinarily
greater in manual processing than in computerized
processing.
d. Most computer systems are designed so that transaction
trails useful for audit purposes do not exist.

18. Given the increasing use of microcomputers as a means for

accessing data bases, along with on-line real-time
processing, companies face a serious challenge relating to
data security. Which of the following is not an appropriate
means for meeting this challenge?
a. Institute a policy of strict identification and
password controls housed in the computer software that
permit only specified individuals to access the
computer files and perform a given function.
b. Limit terminals to perform only certain transactions.
c. Program software to produce a log of transactions
showing date, time, type of transaction, and operator.
d. Prohibit the networking of microcomputers and do not
permit users to access centralized data bases.

19. What type of computer-based system is characterized by data

that are assembled from more than one location and records
that are updated immediately?
a. Microcomputer system.
b. Minicomputer system.
c. Batch processing system.
d. Online real-time system.

20. Company A has recently converted its manual payroll to a

computer-based system. Under the old system, employees who
had resigned or been terminated were occasionally kept on
the payroll and their checks were claimed and cashed by
other employees, in collusion with shop foremen. The
AAS1
1st SEM

controller is concerned that this practice not be allowed to

continue under the new system. The best control for
preventing this form of "payroll padding" would be to
a. Conduct exit interviews with all employees leaving the
company, regardless of reason.
b. Require foremen to obtain a signed receipt from each
employee claiming a payroll check.
c. Require the human resources department to authorize all
hires and terminations, and to forward a current
computerized list of active employee numbers to payroll
prior to processing. Program the computer to reject
inactive employee numbers.
d. Install time clocks for use by all hourly employees.