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Wiley CPA Examination Review Outlines And Study Guides Volume 1 - 2012-2013 39th Edition Patrick R. Delaney, O. Ray Whittington - Solutions
A well-prepared flowchart should make it easier for the auditor toa. Prepare audit procedure manuals.b. Prepare detailed job descriptions.c. Trace the origin and disposition of documents.d. Assess the degree of accuracy of financial data.
Which of the following symbolic representations indicate that a file has been consulted?
In a credit sales and cash receipts system flowchart, symbol X could representa. Auditor’s test data.b. Remittance advices.c. Error reports.d. Credit authorization forms.
The above flowchart depictsa. Program code checking.b. Parallel simulation.c. Integrated test facility.d. Controlled reprocessing.
An auditor’s flowchart of a client’s accounting system is a diagrammatic representation that depicts the auditor’sa. Assessment of control risk.b. Identification of weaknesses in the system.c. Assessment of the control environment’s effectiveness.d. Understanding of the system.
Symbol B most likely representsa. Customer orders.b. Receiving reports.c. Customer checks.d. Sales invoices.
Symbol A most likely representsa. Remittance advice file.b. Receiving report file.c. Accounts receivable master file.d. Cash disbursements transaction file.
Which of the following tools would best give a graphical representation of a sequence of activities and decisions?a. Flowchart.b. Control chart.c. Histogram.d. Run chart.
Which of the following activities most likely would detect whether payroll data were altered during processing?a. Monitor authorized distribution of data control sheets.b. Use test data to verify the performance of edit routines.c. Examine source documents for approval by supervisors.d. Segregate
Internal control is ineffective when computer department personnela. Participate in computer software acquisition decisions.b. Design documentation for computerized systems.c. Originate changes in master files.d. Provide physical security for program files.
Which of the following most likely represents a significant deficiency in internal control?a. The systems analyst reviews applications of data processing and maintains systems documentation.b. The systems programmer designs systems for computerized applications and maintains output controls.c. The
Which of the following is an example of a check digit?a. An agreement of the total number of employees to the total number of checks printed by the computer.b. An algebraically determined number produced by the other digits of the employee number.c. A logic test that ensures all employee numbers
A control feature in an electronic data processing system requires the central processing unit (CPU) to send signals to the printer to activate the print mechanism for each character. The print mechanism, just prior to printing, sends a signal back to the CPU verifying that the proper print
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.
Which of the following is an example of a validity check?a. The computer ensures that a numerical amount in a record does not exceed some predetermined amount.b. As the computer corrects errors and data are successfully resubmitted to the system, the causes of the errors are printed out.c. The
Which of the following input controls is a numeric value computed to provide assurance that the original value has not been altered in construction or transmission?a. Hash total.b. Parity check.c. Encryption.d. Check digit.
Which of the following controls most likely would assure that an entity can reconstruct its financial records?a. Hardware controls are built into the computer by the computer manufacturer.b. Backup diskettes or tapes of files are stored away from originals.c. Personnel who are independent of data
The possibility of erasing a large amount of information stored on magnetic tape most likely would be reduced by the use ofa. File protection rings.b. Check digits.c. Completeness tests.d. Conversion verification.
When computer programs or files can be accessed from terminals, users should be required to enter a(n)a. Parity check.b. Personal identification code.c. Self-diagnosis test.d. Echo check.
For the accounting system of Acme Company, the amounts of cash disbursements entered into a terminal are transmitted to the computer that immediately transmits the amounts back to the terminal for display on the terminal screen. This display enables the operator toa. Establish the validity of the
The use of a header label in conjunction with magnetic tape is most likely to prevent errors by thea. Computer operator.b. Keypunch operator.c. Computer programmer.d. Maintenance technician.
Which of the following activities would most likely be performed in the information systems department?a. Initiation of changes to master records.b. Conversion of information to machine-readable form.c. Correction of transactional errors.d. Initiation of changes to existing applications.
Which of the following controls is a processing control designed to ensure the reliability and accuracy of data processing?Limit test Validity check testa. Yes Yesb. No Noc. No Yesd. Yes No
In entering the billing address for a new client in Emil Company’s computerized database, a clerk erroneously entered a nonexistent zip code. As a result, the first month’s bill mailed to the new client was returned to Emil Company.Which one of the following would most likely have led to
A customer intended to order 100 units of product Z96014, but incorrectly ordered nonexistent product Z96015. Which of the following controls most likely would detect this error?a. Check digit verification.b. Record count.c. Hash total.d. Redundant data check.
An entity has the following invoices in a batch:Invoice # Product Quantity Unit price 201 F10 150 5.00 202 G15 200 10.00 203 H20 250 25.00 204 K35 300 30.00 Which of the following most likely represents a hash total?a. FGHK80b. 4c. 204d. 810
Which of the following security controls would best prevent unauthorized access to sensitive data through an unattended data terminal directly connected to a mainframe?a. Use of a screen saver with a password.b. Use of workstation scripts.c. Encryption of data files.d. Automatic log-off of inactive
Computer program libraries can best be kept secure bya. Installing a logging system for program access.b. Monitoring physical access to program library media.c. Restricting physical and logical access.d. Denying access from remote terminals.
Preventing someone with sufficient technical skill from circumventing security procedures and making changes to production programs is best accomplished bya. Reviewing reports of jobs completed.b. Comparing production programs with independently controlled copies.c. Running test data
To avoid invalid data input, a bank added an extra number at the end of each account number and subjected the new number to an algorithm. This technique is known asa. Optical character recognition.b. A check digit.c. A dependency check.d. A format check.
Which of the following are essential elements of the audit trail in an electronic data interchange (EDI) system?a. Network and sender/recipient acknowledgments.b. Message directories and header segments.c. Contingency and disaster recovery plans.d. Trading partner security and mailbox codes.
Which of the following is an essential element of the audit trail in an electronic data interchange (EDI) system?a. Disaster recovery plans that ensure proper backup of files.b. Encrypted hash totals that authenticate messages.c. Activity logs that indicate failed transactions.d. Hardware security
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?a. When the confidentiality of data is the primary risk, message authentication is the preferred control rather than encryption.b. Encryption performed by physically
Which of the following statements is correct concerning internal control in an electronic data interchange(EDI) system?a. Preventive controls generally are more important than detective controls in EDI systems.b. Control objectives for EDI systems generally are different from the objectives for
When evaluating internal control of an entity that processes sales transactions on the Internet, an auditor would be most concerned about thea. Lack of sales invoice documents as an audit trail.b. Potential for computer disruptions in recording sales.c. Inability to establish an integrated test
To properly control access to accounting database files, the database administrator should ensure that database system features are in place to permita. Read-only access to the database files.b. Updating from privileged utilities.c. Access only to authorized logical views.d. User updates of their
In a large organization, the biggest risk in not having an adequately staffed information center help desk isa. Increased difficulty in performing application audits.b. Inadequate documentation for application systems.c. Increased likelihood of use of unauthorized program code.d. Persistent errors
Good planning will help an organization restore computer operations after a processing outage. Good recovery planning should ensure thata. Backup/restart procedures have been built into job streams and programs.b. Change control procedures cannot be bypassed by operating personnel.c. Planned
Pirated software obtained through the Internet may lead to civil lawsuits or criminal prosecution. Of the following, which would reduce an organization’s risk in this area?I. Maintain a log of all software purchases.II. Audit individual computers to identify software on the computers.III.
A company often revises its production processes.The changes may entail revisions to processing programs.Ensuring that changes have a minimal impact on processing and result in minimal risk to the system is a function ofa. Security administration.b. Change control.c. Problem tracking.d.
A manufacturer is considering using bar-code identification for recording information on parts used by the manufacturer. A reason to use bar codes rather than other means of identification is to ensure thata. The movement of all parts is recorded.b. The movement of parts is easily and quickly
A corporation receives the majority of its revenue from top-secret military contracts with the government.Which of the following would be of greatest concern to an auditor reviewing a policy about selling the company’s used microcomputers to outside parties?a. Whether deleted files on the hard
Some companies have replaced mainframe computers with microcomputers and networks because the smaller computers could do the same work at less cost. Assuming that management of a company decided to launch a downsizing project, what should be done with respect to mainframe applications such as the
Minimizing the likelihood of unauthorized editing of production programs, job control language, and operating system software can best be accomplished bya. Database access reviews.b. Compliance reviews.c. Good change-control procedures.d. Effective network security software.
Output controls ensure that the results of computer processing are accurate, complete, and properly distributed.Which of the following is not a typical output control?a. Reviewing the computer processing logs to determine that all of the correct computer jobs executed properly.b. Matching input
A “hot site” is most frequently associated witha. Disaster recovery.b. Online relational database design.c. Source programs.d. Temperature control for computer.
A widely used disaster recovery approach includesa. Encryption.b. Firewalls.c. Regular backups.d. Surge protectors.
Almost all commercially marketed software is Copyrighted Copy protecteda. Yes Yesb. Yes Noc. No Yesd. No No
Which of the following procedures would an entity most likely include in its disaster recovery plan?a. Convert all data from EDI format to an internal company format.b. Maintain a Trojan horse program to prevent illicit activity.c. Develop an auxiliary power supply to provide uninterrupted
A company is concerned that a power outage or disaster could impair the computer hardware’s ability to function as designed. The company desires off-site backup hardware facilities that are fully configured and ready to operate within several hours. The company most likely should consider aa.
Which of the following procedures would an entity most likely include in its computer disaster recovery plan?a. Develop an auxiliary power supply to provide uninterrupted electricity.b. Store duplicate copies of critical files in a location away from the computer center.c. Maintain a listing of
According to COBIT operating systems are part of which type of IT resources?a. Applications.b. Information.c. Infrastructure.d. People.
COBIT defines information technology activities in a process model with which of the following four domains?a. Plan and organize, acquire and implement, deliver and support, and monitor and evaluate.b. Understand and document, develop and acquire, implement and structure, and control and support.c.
Many of the Web 2.0 applications rely on an XMLbased application that facilitates the sharing and syndication of web content, by subscription, Which of the applications below represents this XML application?a. Wiki.b. Blog.c. RSS/Atom Feeds.d. Twitter.D. Control Objectives for Information and
Which of the following is a password security problem?a. Users are assigned passwords when accounts are created, but do not change them.b. Users have accounts on several systems with different passwords.c. Users copy their passwords on note paper, which is kept in their wallets.d. Users select
Which of the following passwords would be most difficult to crack?a. OrCa!FlSib. languagec. 12 HOUSE 24d. pass56word
In building an electronic data interchange (EDI) system, what process is used to determine which elements in the entity’s computer system correspond to the standard data elements?a. Mapping.b. Translation.c. Encryption.d. Decoding.
Which of the following is an encryption feature that can be used to authenticate the originator of a document and ensure that the message is intact and has not been tampered with?a. Heuristic terminal.b. Perimeter switch.c. Default settings.d. Digital signatures.
A retail entity uses electronic data interchange (EDI) in executing and recording most of its purchase transactions.The entity’s auditor recognized that the documentation of the transactions will be retained for only a short period of time. To compensate for this limitation, the auditor most
Which of the following is an example of how specific controls in a database environment may differ from controls in a nondatabase environment?a. Controls should exist to ensure that users have access to and can update only the data elements that they have been authorized to access.b. Controls over
Which of the following is a network node that is used to improve network traffic and to set up as a boundary that prevents traffic from one segment to cross over to another?a. Router.b. Gateway.c. Firewall.d. Heuristic.
Which of the following is usually a benefit of transmitting transactions in an electronic data interchange (EDI)environment?a. A compressed business cycle with lower year-end receivables balances.b. A reduced need to test computer controls related to sales and collections transactions.c. An
Which of the following statements most likely represents a disadvantage for an entity that keeps microcomputerprepared data files rather than manually prepared files?a. Random error associated with processing similar transactions in different ways is usually greater.b. It is usually more difficult
Which of the following statements is correct concerning internal control when a client is using an electronic data interchange system for its sales?a. Controls should be established over determining that all suppliers are included in the system.b. Encryption controls may help to assure that
Which of the following is not considered an exposure involved with electronic data interchange (EDI) systems as compared to other systems?a. Increased reliance upon computer systems.b. Delayed transaction processing time.c. Possible loss of confidentiality of information.d. Increased reliance upon
Many entities use the Internet as a network to transmit electronic data interchange (EDI) transactions. An advantage of using the Internet for electronic commerce rather than a traditional value-added network (VAN) is that the Interneta. Permits EDI transactions to be sent to trading partners as
Which of the following represents an additional cost of transmitting business transactions by means of electronic data interchange (EDI) rather than in a traditional paper environment?a. Redundant data checks are needed to verify that individual EDI transactions are not recorded twice.b. Internal
Which of the following is considered a component of a local area network?a. Program flowchart.b. Loop verification.c. Transmission media.d. Input routine.
Which of the following characteristics distinguish electronic data interchange (EDI) from other forms of electronic commerce?a. The cost of sending EDI transactions using a value-added network (VAN) is less than the cost of using the Internet.b. Software maintenance contracts are unnecessary
Which of the following would an auditor ordinarily consider the greatest risk regarding an entity’s use of electronic data interchange (EDI)?a. Authorization of EDI transactions.b. Duplication of EDI transmissions.c. Improper distribution of EDI transactions.d. Elimination of paper documents.
Securing client/server systems is a complex task because of all of the following factors except:a. The use of relational databases.b. The number of access points.c. Concurrent operation of multiple user sessions.d. Widespread data access and update capabilities.
To reduce security exposure when transmitting proprietary data over communication lines, a company should usea. Asynchronous modems.b. Authentic techniques.c. Call-back procedures.d. Cryptographic devices.
Which of the following statements is correct regarding the Internet as a commercially viable network?a. Organizations must use firewalls if they wish to maintain security over internal data.b. Companies must apply to the Internet to gain permission to create a homepage to engage in electronic
End-user computing is most likely to occur on which of the following types of computers?a. Mainframe.b. Minicomputers.c. Personal computers.d. Personal reference assistants.
End-user computing is an example of which of the following?a. Client/server processing.b. A distributed system.c. Data mining.d. Decentralized processing.
An auditor is least likely to find that a client’s data is input througha. Magnetic tape reader.b. Dynamic linking character reader.c. Point-of-sale recorders.d. Touch sensitive screens.
In traditional information systems, computer operators are generally responsible for backing up software and data files on a regular basis. In distributed or cooperative systems, ensuring that adequate backups are taken is the responsibility ofa. User management.b. Systems programmers.c. Data entry
Methods to minimize the installation of unlicensed microcomputer software include all of the following except:a. Employee awareness programs.b. Regular audits for unlicensed software.c. Regular monitoring of network access and start-up scripts.d. An organizational policy that includes software
Which of the following risks is not greater in an electronic funds transfer (EFT) environment than in a manual system using paper transactions?a. Unauthorized access and activity.b. Duplicate transaction processing.c. Higher cost per transaction.d. Inadequate backup and recovery capabilities.
Which of the following risks is more likely to be encountered in an end-user computing (EUC) environment as compared to a mainframe computer system?a. Inability to afford adequate uninterruptible power supply systems.b. User input screens without a graphical user interface(GUI).c. Applications that
The internal auditor is reviewing a new policy on electronic mail. Appropriate elements of such a policy would include all of the following except:a. Erasing all employee’s electronic mail immediately upon employment termination.b. Encrypting electronic mail messages when transmitted over phone
Which of the following is likely to be a benefit of electronic data interchange (EDI)?a. Increased transmission speed of actual documents.b. Improved business relationships with trading partners.c. Decreased liability related to protection of proprietary business data.d. Decreased requirements for
A company’s management is concerned about computer data eavesdropping and wants to maintain the confidentiality of its information as it is transmitted. The company should utilizea. Data encryption.b. Dial-back systems.c. Message acknowledgement procedures.d. Password codes.
The use of message encryption softwarea. Guarantees the secrecy of data.b. Requires manual distribution of keys.c. Increases system overhead.d. Reduces the need for periodic password changes.
Which of the following is a risk that is higher when an electronic funds transfer (EFT) system is used?a. Improper change control procedures.b. Unauthorized access and activity.c. Insufficient online edit checks.d. Inadequate backups and disaster recovery procedures.
Which of the following operating procedures increases an organization’s exposure to computer viruses?a. Encryption of data files.b. Frequent backup of files.c. Downloading public-domain software from electronic bulletin boards.d. Installing original copies of purchased software on hard disk
Which of the following is an indication that a computer virus of this category is present?a. Frequent power surges that harm computer equipment.b. Unexplainable losses of or changes to data.c. Inadequate backup, recovery, and contingency plans.d. Numerous copyright violations due to unauthorized
Management is concerned that data uploaded from a microcomputer to the company’s mainframe system in batch processing may be erroneous. Which of the following controls would best address this issue?a. The mainframe computer should be backed up on a regular basis.b. Two persons should be present
A company using EDI made it a practice to track the functional acknowledgments from trading partners and to issue warning messages if acknowledgments did not occur within a reasonable length of time. What risk was the company attempting to address by this practice?a. Transactions that have not
When developing a new computer system that will handle customer orders and process customer payments, a highlevel systems design phase would include determination of which of the following?a. How the new system will affect current inventory and general ledger systems.b. How the file layouts will be
Laptop computers provide automation outside of the normal office location. Which of the following would provide the least security for sensitive data stored on a laptop computer?a. Encryption of data files on the laptop computer.b. Setting up a password for the screensaver program on the laptop
A webpage is most frequently created usinga. Java or C++.b. Visual Basic.c. SQL.d. HTML or XML.
A set of rules for exchanging data between two computers is aa. Communicator.b. Operating system.c. Protocol.d. Transmission speed.
The network most frequently used for private operations designed to link computers within widely separated portions of an organization is referred to as a(n)a. Bulletin board service.b. Local area network.c. Wide area network.d. Zero base network.
Which is least likely to be considered a component of a computer network?a. Applications programs.b. Computers.c. Software.d. Routers.
A computer that is designed to provide software and other applications to other computers is referred to as aa. Microcomputer.b. Network computer.c. Server.d. Supercomputer.
LAN is the abbreviation fora. Large Area Network.b. Local Area Network.c. Longitudinal Analogue Network.d. Low Analytical Nets.
Which of the following characteristics distinguishes electronic data interchange (EDI) from other forms of electronic commerce?a. EDI transactions are formatted using the standards that are uniform worldwide.b. EDI transactions need not comply with generally accepted accounting principles.c. EDI
What type of computer 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.
In a computerized system, procedure or problemoriented language is converted to machine language through a(n)a. Interpreter.b. Verifier.c. Compiler.d. Converter.
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