Internal Auditing Pre-Test Questions
Course Introduction
Internal Auditing provides an in-depth exploration of the principles, practices, and significance of internal auditing within organizations. Students will learn about the roles and responsibilities of internal auditors, audit planning and execution, risk assessment, internal controls, compliance, and reporting. The course also emphasizes ethical standards, auditing techniques, and the use of technology in audits, preparing students to add value and improve organizational operations through systematic evaluation and risk management.
Recommended Textbook
Information Technology Auditing 3rd Edition by James A. Hall
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12 Chapters
1295 Verified Questions
1295 Flashcards
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Chapter 1: Auditing and Internal Control
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103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/5812
Sample Questions
Q1) Both the SEC and the PCAOB require management to use the COBIT framework for assessing internal control adequacy.
A)True
B)False
Answer: False
Q2) The board of directors consists entirely of personal friends of the chief executive officer.This indicates a weakness in
A) the accounting system
B) the control environment
C) control procedures
D) this is not a weakness
Answer: B
Q3) Audit risk is the probability that the auditor will render an unqualified opinion on financial statements that are materially misstated.
A)True
B)False
Answer: True
Q4) Locking petty cash in a safe is an example of __________________________. Answer: access controls
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Chapter 2: Auditing IT Governance Controls
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99 Verified Questions
99 Flashcards
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Sample Questions
Q1) Which of the following is not true?
A) When management outsources their organization's IT functions, they also outsource responsibility for internal control.
B) Once a client firm has outsourced specific IT assets, its performance becomes linked to the vendor's performance.
C) IT outsourcing may affect incongruence between a firm's IT strategic planning and its business planning functions.
D) The financial justification for IT outsourcing depends upon the vendor achieving economies of scale.
Answer: A
Q2) A widespread natural disaster is a risk associated with a ROC.
A)True
B)False
Answer: True
Q3) What is a mirrored data center?
Answer: A mirrored data center duplicates programs and data onto a computer at a separate location.Mirroring is performed for backup purposes.
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Chapter 3: Security Part I: Auditing Operating Systems and Networks
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143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/5814
Sample Questions
Q1) Explain how smurf attacks can be controlled.
Answer: The targeted organization can program their firewall to ignore all communication from the attacking site,once the attackers IP address is determined.
Q2) A software program that allows access to a system without going through the normal logon procedures is called a
A) logic bomb
B) Trojan horse
C) worm
D) back door
Answer: D
Q3) What are some typical problems with passwords?
Answer: users failing to remember passwords; failure to change passwords frequently; displaying passwords where others can see them; using simple,easy-to-guess passwords
Q4) A digital signature is a digital copy of the sender's actual signature that cannot be forged.
A)True
B)False
Answer: False
Page 5
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Chapter 4: IT Security Part II: Auditing Database Systems
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) An important feature associated with the traditional approach to data management is the ability to produce ad hoc reports.
A)True
B)False
Q2) What is DML?
Q3) All of the following are elements of the DBMS which facilitate user access to the database except
A) query language
B) data access language
C) data manipulation language
D) data definition language
Q4) In the database method of data management,access authority is maintained by systems programming.
A)True
B)False
Q5) The database management system provides a controlled environment for accessing the database.
A)True
B)False
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Chapter 5: Systems Development and Program Change
Activities
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) Why is the payback method often more useful than the net present value method for evaluating systems projects?
Q2) A tangible benefit can be measured and expressed in financial terms.
A)True
B)False
Q3) The benefits of the object-oriented approach to systems design include all of the following except
A) this approach does not require input from accountants and auditors
B) development time is reduced
C) a standard module once tested does not have to be retested until changes are made D) system maintenance activities are simplified
Q4) The payback method is often more useful than the net present value method for evaluating systems projects because the effective lives of information system tend to be short and shorter payback projects are often desirable.
A)True
B)False
Q5) List three advantages and one disadvantage of commercial software.
Page 7
Q6) What are three problems that account for most system failures?
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Chapter 6: Overview of Transaction Processing and Financial Reporting Systems
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) In general,a special journal would not be used to record
A) sales
B) cash disbursements
C) depreciation
D) purchases
Q2) Documents that are created at the beginning of the transaction are called
Q3) Which situation indicates an internal control risk in the General Ledger/Financial Reporting Systems (GL/FRS)?
A) the employee who maintains the cash journal computes depreciation expense
B) the cash receipts journal voucher is approved by the Treasurer
C) the cash receipts journal vouchers are prenumbered and stored in a locked safe
D) the employee who maintains the cash receipts journal records transactions in the accounts receivable subsidiary ledger
Q4) An inverted triangle with the letter "N" represents a file in "name" order.
A)True
B)False
Q5) List,in order,the steps in the Financial Accounting Process.
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Chapter 7: Computer-Assisted Audit Tools and Techniques
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) All of the following concepts are associated with the black box approach to auditing computer applications except
A) the application need not be removed from service and tested directly
B) auditors do not rely on a detailed knowledge of the application's internal logic
C) the auditor reconciles previously produced output results with production input transactions
D) this approach is used for complex transactions that receive input from many sources
Q2) Input controls are programmed procedures that perform tests on master file data to ensure they are free from errors.
A)True
B)False
Q3) Which statement is not correct? The audit trail in a computerized environment
A) consists of records that are stored sequentially in an audit file
B) traces transactions from their source to their final disposition
C) is a function of the quality and integrity of the application programs
D) may take the form of pointers, indexes, and embedded keys
Q4) Explain input controls.
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Chapter 8: Data Structures and CAATTs for Data Extraction
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89 Verified Questions
89 Flashcards
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Sample Questions
Q1) What is the update anomaly?
Q2) GAS can be used with simple data structures but not complex structures A)True
B)False
Q3) Explain the basic results that come from the restrict,project,and join functions.
Q4) Improperly normalized databases are associated with three types of anomalies: the update anomaly,the insertion anomaly,and the deletion anomaly. A)True
B)False
Q5) How does the database approach solve the problem of data redundancy?
Q6) What are the two fundamental components of data structures?
Q7) What is a transitive dependency?
Q8) Under the database approach,data is viewed as proprietary or owned by users. A)True
B)False
Q9) Explain the following three types of pointers: physical address pointer,relative address pointer,and logical key pointer.
Q10) What is the insertion anomaly?
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Chapter 9: Auditing the Revenue Cycle
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105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/5820
Sample Questions
Q1) What is the objective of re-engineering?
Q2) How may an employee embezzle funds by issuing an unauthorized sales credit memo if the appropriate segregation of functions and authorization controls were not in place?
Q3) In the revenue cycle,the internal control "limit access" applies to physical assets only.
A)True
B)False
Q4) The accounts receivable clerk destroys all invoices for sales made to members of her family and does not record the sale in the accounts receivable subsidiary ledger.Which procedure will not detect this fraud?
A) prenumber and sequence check all invoices
B) reconcile the accounts receivable control to the accounts receivable subsidiary ledger
C) prepare monthly customer statements
D) reconcile total sales on account to the debits in the accounts receivable subsidiary ledger
Q5) State two specific functions or jobs that should be segregated in the cash receipts system.
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Chapter 10: Auditing the Expenditure Cycle
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) The major risk exposures associated with the receiving department include all of the following except
A) goods are accepted without a physical count
B) there is no inspection for goods damaged in shipment
C) inventories are not secured on the receiving dock
D) the audit trail is destroyed
Q2) When a trading partner agreement is in place,the traditional three way match may be eliminated.
A)True
B)False
Q3) In a real-time processing system with a high number of transactions,the best and most practical control over cash disbursements is to have
A) all checks manually signed by the treasurer
B) all checks signed by check-signing equipment
C) checks over a certain dollar amount manually signed by the treasurer
D) checks over a certain dollar amount manually signed by the cash disbursements clerk
Q4) Name the key tasks associated with purchases procedures.
Q5) List specific jobs that should be segregated in the cash disbursements system.
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Chapter 12: Business Ethics, Fraud, and Fraud Detection
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85 Verified Questions
85 Flashcards
Source URL: https://quizplus.com/quiz/5822
Sample Questions
Q1) What are the five conditions necessary for an act to be considered fraudulent?
Q2) When certain customers made cash payments to reduce their accounts receivable,the bookkeeper embezzled the cash and wrote off the accounts as uncollectible.Which control procedure would most likely prevent this irregularity?
A) segregation of duties
B) accounting records
C) accounting system
D) access controls
Q3) Employee fraud involves three steps.Of the following,which is not involved?
A) concealing the crime to avoid detection
B) stealing something of value
C) misstating financial statements
D) converting the asset to a usable form
Q4) Name three types of program fraud.
Q5) The most common access point for perpetrating computer fraud is at the data collection stage.
A)True
B)False
Q6) Name three forms of computer fraud.
Q7) What is the objective of SAS 99?
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Chapter 11: Enterprise Resource Planning Systems
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92 Verified Questions
92 Flashcards
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Sample Questions
Q1) A data warehouse is a relational or multi-dimensional database that may require hundreds of gigabytes of storage.
A)True
B)False
Q2) Data warehousing processes does not include
A) modeling data
B) condensing data
C) extracting data
D) transforming data
Q3) Goals of ERP include all of the following except
A) improved customer service
B) improvements of legacy systems
C) reduced production time
D) increased production
Q4) What is SCM software?
Q5) An access control list specifies the user-ID,the resources available to the user,and the level of permission granted.
A)True
B)False
Q6) What are the basic stages of the data warehousing process?
Page 14
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