Data Analytics for Accounting 1st Edition by Vernon Richardson - Test BankData Analytics for Accounting 1st Edition by Vernon Richardson - Test Bank

Data Analytics for Accounting 1st Edition by Vernon Richardson – Test Bank

 

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Data Analytics for Accounting, 1e (Richardson)

Chapter 5   The Modern Audit and Continuous Auditing

 

1) A flat file is a single table of data with user-defined attributes.

 

2) Heterogeneous systems represent one single installation or instance of a system.

 

3) Production systems are those active systems that collect, report, and are directly affected by current transactions.

 

4) Systems translator software maps the various tables and fields from varied ERP systems into a consistent format.

 

5) Heterogeneous systems represent multiple installations or instances of a system.

 

6) A data warehouse is a repository of data, including financial data, accumulated from internal and external data sources, to help management decision making.

 

7) The Audit Data Standards define common tables and fields that are needed by auditors to perform common audit tasks. The Securities and Exchange Commission, or SEC, developed these standards.

 

8) A flat file is a double table of data with user-defined attributes.

 

9) Production systems are those active systems that collect, report, and are directly affected by future transactions.

 

10) Systems translator software maps the various tables and fields from varied EMR systems into a consistent format.

 

11) The Base Standard defines the order for files and fields as well as some master data for users and business units.

 

12) The Inventory Subledger Standard defines product master data, location data, inventory on hand data, and inventory movement.

 

13) The General Ledger Standard adds the chart of accounts, source listings, trial balance, and GL detail.

 

14) The Procure to Pay Subledger Standard identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.

 

15) The Order to Cash Subledger Standard focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.

 

16) An audit plan consists solely of a methodology which directs the audit work and includes substantive testing.

17) Both simple and complex data analytics can be applied to a client’s data during the planning stage of the audit to identify which areas the auditor should focus on.

 

18) The evaluation of audit data may be distilled into a feasibility score.

 

19) Data analytics and audit automation allow auditors to occasionally monitor and ignore the systems and processes within their companies.

 

20) Continuous auditing is a process that provides real-time assurance over business processes and systems.

 

21) Under the guidance of the chief audit executive (CAE) or another manager, teams can develop and implement analytical techniques to aid the following audits except:

1. A) information systems audits.
2. B) social media audits.
3. C) compliance audits.
4. D) forensic audits in the case of fraud.

 

22) Under the guidance of the chief audit executive (CAE) or another manager, teams can develop and implement analytical techniques to aid the following audits except:

1. A) financial statement audits.
2. B) archaic audits.
3. C) process efficiency audits.
4. D) forensic audits.

 

23) Under the guidance of the chief audit executive (CAE) or another manager, teams can develop and implement analytical techniques to aid the following audits except:

1. A) governance audits.
2. B) risk audits.
3. C) management audits.
4. D) compliance audits.

 

24) Which Accounting Data Standards ledger identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts?

1. A) Base Standard
2. B) General Ledger Standards
3. C) Procure to Pay Subledger Standard
4. D) Inventory Subledger Standard

 

25) Which Accounting Data Standard identifies product master data, location data, inventory on hand data, and inventory movement?

1. A) Base Standard
2. B) General Ledger Standards
3. C) Procure to Pay Subledger Standard
4. D) Inventory Subledger Standard

26) Which Accounting Data Standard focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts?

1. A) General Ledger Standards
2. B) Order to Cash Subledger
3. C) Procure to Pay Subledger Standard
4. D) Inventory Subledger Standard

 

27) Which Accounting Data Standard defines the format for files and fields as well as some master data for users and business units?

1. A) Base Standard
2. B) General Ledger Standards
3. C) Order to Cash Subledger
4. D) Procure to Pay Subledger Standard

 

28) Which Accounting Data Standard includes the chart of accounts, source listings, trial balance, and GL (journal entry) detail?

1. A) Base Standard
2. B) General Ledger Standards
3. C) Order to Cash Subledger
4. D) Procure to Pay Subledger Standard

 

29) Which of the following best defines the Accounting Data Standards: Inventory Subledger?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines product master data, location data, inventory on hand data, and inventory movement.

 

30) Which of the following best defines the Accounting Data Standards: Procure to Pay Subledger?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines product master data, location data, inventory on hand data, and inventory movement.

31) Which of the following best defines the Accounting Data Standards: Order to Cash Subledger?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts, and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines product master data, location data, inventory on hand data, and inventory movement.

32) Which of the following best defines the Accounting Data Standards: General Ledger?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines the format for files and fields as well as some master data for users and business units.

 

33) Which of the following best defines the Accounting Data Standards: Base Standard?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines the format for files and fields as well as some master data for users and business units.

 

34) Which of the following describes a homogenous systems approach?

1. A) ensures that all of its divisions and subsidiaries use a uniform installation of the chosen ERP system
2. B) allows all divisions and subsidiaries use the ERP system that works best for each location
3. C) provides a single table of data with user-defined attributes that is stored separate from any application
4. D) maps the various tables and fields from multiple ERP systems

35) Which of the following describes an example of a flat file:

1. A) ensures that all of its divisions and subsidiaries use a uniform installation of the chosen ERP system
2. B) allows all divisions and subsidiaries use the ERP system that works best for each location
3. C) provides a single table of data with user-defined attributes that is stored separate from any application
4. D) maps the various tables and fields from multiple ERP systems

 

36) Which of the following describes an example of a production systems:

1. A) collects, reports, and is directly affected by current transactions.
2. B) allows all divisions and subsidiaries to use the ERP system that works best for each location.
3. C) provides a single table of data with user-defined attributes that is stored separately from any application.
4. D) maps the various tables and fields from multiple ERP systems.

 

37) Which of the following describes a heterogeneous system approach:

1. A) collects, reports, and is directly affected by current transactions.
2. B) allows all divisions and subsidiaries to use the ERP system that works best for each location.
3. C) provides a single table of data with user-defined attributes that is stored separately from any application.
4. D) maps the various tables and fields from multiple ERP systems.

 

38) Which of the following is an example of systems translator software:

1. A) collects, reports, and is directly affected by current transactions.
2. B) allows all divisions and subsidiaries to use the ERP system that works best for each location.
3. C) provides a single table of data with user-defined attributes that is stored separately from any application.
4. D) maps the various tables and fields from multiple ERP systems.

 

39) ________ ensures that all of its divisions and subsidiaries use a uniform installation of one ERP system. ________ allows for the use of bolt on the systems of companies that are acquired and uses a series of translators to convert the output of various systems into usable financial information.

1. A) Continuous reporting; continuous monitoring
2. B) Continuous monitoring; continuous reporting
3. C) The heterogeneous systems approach; the homogenous systems approach
4. D) The homogenous systems approach; the heterogeneous systems approach

40) ________ constantly evaluates internal controls and transactions and ________ provides the status of the system so that an auditor can know at any given time whether the system is operating within the parameters.

1. A) Continuous reporting; continuous monitoring
2. B) Continuous monitoring; continuous reporting
3. C) The heterogeneous systems approach; the homogenous systems approach
4. D) The homogenous systems approach; the heterogeneous systems approach

 

41) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. A ________ occurs when too many alarms are false positives.

1. A) Flood of alarms
2. B) Exception report
3. C) A negative event
4. D) Information overload

 

42) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. A ________ occurs when a normal transaction is classified as problematic.

1. A) False negative
2. B) True negative
3. C) True positive
4. D) False positive

 

43) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. A ________ occurs when an abnormal transaction is classified as problematic.

1. A) False negative
2. B) True negative
3. C) True positive
4. D) False positive

 

44) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. A ________ occurs when a normal transaction is not classified as problematic.

1. A) False negative
2. B) True negative
3. C) True positive
4. D) False positive

45) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. ________ is an abnormal transaction is not classified as problematic.

1. A) False negative
2. B) True negative
3. C) True positive
4. D) False positive

 

46) A ________ is a repository of data accumulated from internal and external data sources, including financial data, to help management decision making.

1. A) flat file
2. B) data warehouse
3. C) homogenous system
4. D) heterogeneous system

 

47) Chapter 5 discusses the essential properties of working papers. With respect to data analytics, working papers should contain the following items except:

1. A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
2. B) evidence, including performance evaluations, of the competency of the auditors completing the working paper.
3. C) database maps and data dictionaries that define the location and types of data auditors will analyze
4. D) documentation about existing automated controls, including parameters and variables used for analysis

 

48) Chapter 5 discusses the essential properties of working papers. With respect to data analytics, working papers should contain the following items except:

1. A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
2. B) evidence, including data extracts, transformed data, and model output that provides support for the functioning controls and management assertions.
3. C) superseded drafts of working papers or financial statements, notes that reflect incomplete or preliminary thinking, previous copies of documents corrected for typographical or other errors, and duplicates of documents.
4. D) documentation about existing automated controls, including parameters and variables used for analysis

 

 

49) Chapter 5 discusses the essential properties of working papers. With respect to data analytics, working papers should contain the following items except:

1. A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
2. B) IT-related documentation, including flowchart and process maps that provide system understanding
3. C) database maps and data dictionaries that define the location and types of data auditors will analyze
4. D) memos to future auditors documenting issues with problem members of the client’s management team

 

50) Chapter 5 discusses the essential properties of working papers. With respect to data analytics, working papers should contain the following items except:

1. A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
2. B) IT-related documentation, including flowchart and process maps that provide system understanding
3. C) database maps and data dictionaries that define the location and types of data auditors will analyze
4. D) documentation of every matter considered during the audit.

Data Analytics for Accounting, 1e (Richardson)

Chapter 5   The Modern Audit and Continuous Auditing

 

1) A flat file is a single table of data with user-defined attributes.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

2) Heterogeneous systems represent one single installation or instance of a system.

 

Answer:  FALSE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology

 

3) Production systems are those active systems that collect, report, and are directly affected by current transactions.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology

 

4) Systems translator software maps the various tables and fields from varied ERP systems into a consistent format.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology

 

 

5) Heterogeneous systems represent multiple installations or instances of a system.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

6) A data warehouse is a repository of data, including financial data, accumulated from internal and external data sources, to help management decision making.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

7) The Audit Data Standards define common tables and fields that are needed by auditors to perform common audit tasks. The Securities and Exchange Commission, or SEC, developed these standards.

 

Answer:  FALSE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

8) A flat file is a double table of data with user-defined attributes.

 

Answer:  FALSE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

9) Production systems are those active systems that collect, report, and are directly affected by future transactions.

 

Answer:  FALSE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

10) Systems translator software maps the various tables and fields from varied EMR systems into a consistent format.

 

Answer:  FALSE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

11) The Base Standard defines the order for files and fields as well as some master data for users and business units.

 

Answer:  FALSE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

12) The Inventory Subledger Standard defines product master data, location data, inventory on hand data, and inventory movement.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

13) The General Ledger Standard adds the chart of accounts, source listings, trial balance, and GL detail.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

14) The Procure to Pay Subledger Standard identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.

 

Answer:  TRUE

Difficulty: 2 Medium

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

15) The Order to Cash Subledger Standard focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

16) An audit plan consists solely of a methodology which directs the audit work and includes substantive testing.

 

Answer:  FALSE

Difficulty: 2 Medium

Topic:  Automating the Audit Plan

Learning Objective:  05-04 Select Appropriate Audit Tasks and Approaches

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

17) Both simple and complex data analytics can be applied to a client’s data during the planning stage of the audit to identify which areas the auditor should focus on.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Automating the Audit Plan

Learning Objective:  05-04 Select Appropriate Audit Tasks and Approaches

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

18) The evaluation of audit data may be distilled into a feasibility score.

 

Answer:  FALSE

Difficulty: 1 Easy

Topic:  Automating the Audit Plan

Learning Objective:  05-04 Select Appropriate Audit Tasks and Approaches

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

19) Data analytics and audit automation allow auditors to occasionally monitor and ignore the systems and processes within their companies.

 

Answer:  FALSE

Difficulty: 2 Medium

Topic:  Continuous Auditing Techniques

Learning Objective:  05-05 Evaluate Audit Alarms as Part of Continuous Auditing

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

20) Continuous auditing is a process that provides real-time assurance over business processes and systems.

 

Answer:  TRUE

Difficulty: 1 Easy

Topic:  Continuous Auditing Techniques

Learning Objective:  05-05 Evaluate Audit Alarms as Part of Continuous Auditing

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; BB Industry

 

 

21) Under the guidance of the chief audit executive (CAE) or another manager, teams can develop and implement analytical techniques to aid the following audits except:

1. A) information systems audits.
2. B) social media audits.
3. C) compliance audits.
4. D) forensic audits in the case of fraud.

 

Answer:  B

Difficulty: 2 Medium

Topic:  The Modern Audit

Learning Objective:  05-01 Understand Modern Auditing Techniques

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

22) Under the guidance of the chief audit executive (CAE) or another manager, teams can develop and implement analytical techniques to aid the following audits except:

1. A) financial statement audits.
2. B) archaic audits.
3. C) process efficiency audits.
4. D) forensic audits.

 

Answer:  B

Difficulty: 2 Medium

Topic:  The Modern Audit

Learning Objective:  05-01 Understand Modern Auditing Techniques

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

23) Under the guidance of the chief audit executive (CAE) or another manager, teams can develop and implement analytical techniques to aid the following audits except:

1. A) governance audits.
2. B) risk audits.
3. C) management audits.
4. D) compliance audits.

 

Answer:  C

Difficulty: 1 Easy

Topic:  The Modern Audit

Learning Objective:  05-01 Understand Modern Auditing Techniques

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

24) Which Accounting Data Standards ledger identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts?

1. A) Base Standard
2. B) General Ledger Standards
3. C) Procure to Pay Subledger Standard
4. D) Inventory Subledger Standard

 

Answer:  C

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

25) Which Accounting Data Standard identifies product master data, location data, inventory on hand data, and inventory movement?

1. A) Base Standard
2. B) General Ledger Standards
3. C) Procure to Pay Subledger Standard
4. D) Inventory Subledger Standard

 

Answer:  D

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

26) Which Accounting Data Standard focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts?

1. A) General Ledger Standards
2. B) Order to Cash Subledger
3. C) Procure to Pay Subledger Standard
4. D) Inventory Subledger Standard

 

Answer:  B

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

27) Which Accounting Data Standard defines the format for files and fields as well as some master data for users and business units?

1. A) Base Standard
2. B) General Ledger Standards
3. C) Order to Cash Subledger
4. D) Procure to Pay Subledger Standard

 

Answer:  A

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

28) Which Accounting Data Standard includes the chart of accounts, source listings, trial balance, and GL (journal entry) detail?

1. A) Base Standard
2. B) General Ledger Standards
3. C) Order to Cash Subledger
4. D) Procure to Pay Subledger Standard

 

Answer:  B

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

29) Which of the following best defines the Accounting Data Standards: Inventory Subledger?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines product master data, location data, inventory on hand data, and inventory movement.

 

Answer:  D

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

30) Which of the following best defines the Accounting Data Standards: Procure to Pay Subledger?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines product master data, location data, inventory on hand data, and inventory movement.

 

Answer:  B

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

31) Which of the following best defines the Accounting Data Standards: Order to Cash Subledger?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts, and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines product master data, location data, inventory on hand data, and inventory movement.

 

Answer:  A

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

 

32) Which of the following best defines the Accounting Data Standards: General Ledger?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines the format for files and fields as well as some master data for users and business units.

 

Answer:  C

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

33) Which of the following best defines the Accounting Data Standards: Base Standard?

1. A) focuses on sales orders, accounts receivable, shipments, invoices, cash receipts and adjustments to accounts.
2. B) identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts.
3. C) adds the chart of accounts, source listings, trial balance, and GL (journal entry) detail.
4. D) defines the format for files and fields as well as some master data for users and business units.

 

Answer:  D

Difficulty: 1 Easy

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

 

34) Which of the following describes a homogenous systems approach?

1. A) ensures that all of its divisions and subsidiaries use a uniform installation of the chosen ERP system
2. B) allows all divisions and subsidiaries use the ERP system that works best for each location
3. C) provides a single table of data with user-defined attributes that is stored separate from any application
4. D) maps the various tables and fields from multiple ERP systems

 

Answer:  A

Difficulty: 2 Medium

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

35) Which of the following describes an example of a flat file:

1. A) ensures that all of its divisions and subsidiaries use a uniform installation of the chosen ERP system
2. B) allows all divisions and subsidiaries use the ERP system that works best for each location
3. C) provides a single table of data with user-defined attributes that is stored separate from any application
4. D) maps the various tables and fields from multiple ERP systems

 

Answer:  C

Difficulty: 2 Medium

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

36) Which of the following describes an example of a production systems:

1. A) collects, reports, and is directly affected by current transactions.
2. B) allows all divisions and subsidiaries to use the ERP system that works best for each location.
3. C) provides a single table of data with user-defined attributes that is stored separately from any application.
4. D) maps the various tables and fields from multiple ERP systems.

 

Answer:  A

Difficulty: 2 Medium

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

37) Which of the following describes a heterogeneous system approach:

1. A) collects, reports, and is directly affected by current transactions.
2. B) allows all divisions and subsidiaries to use the ERP system that works best for each location.
3. C) provides a single table of data with user-defined attributes that is stored separately from any application.
4. D) maps the various tables and fields from multiple ERP systems.

 

Answer:  B

Difficulty: 2 Medium

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

38) Which of the following is an example of systems translator software:

1. A) collects, reports, and is directly affected by current transactions.
2. B) allows all divisions and subsidiaries to use the ERP system that works best for each location.
3. C) provides a single table of data with user-defined attributes that is stored separately from any application.
4. D) maps the various tables and fields from multiple ERP systems.

 

Answer:  D

Difficulty: 2 Medium

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

39) ________ ensures that all of its divisions and subsidiaries use a uniform installation of one ERP system.  ________ allows for the use of bolt on the systems of companies that are acquired and uses a series of translators to convert the output of various systems into usable financial information.

1. A) Continuous reporting; continuous monitoring
2. B) Continuous monitoring; continuous reporting
3. C) The heterogeneous systems approach; the homogenous systems approach
4. D) The homogenous systems approach; the heterogeneous systems approach

 

Answer:  D

Difficulty: 2 Medium

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

40) ________ constantly evaluates internal controls and transactions and ________ provides the status of the system so that an auditor can know at any given time whether the system is operating within the parameters.

1. A) Continuous reporting; continuous monitoring
2. B) Continuous monitoring; continuous reporting
3. C) The heterogeneous systems approach; the homogenous systems approach
4. D) The homogenous systems approach; the heterogeneous systems approach

 

Answer:  B

Difficulty: 2 Medium

Topic:  Continuous Auditing Techniques

Learning Objective:  05-05 Evaluate Audit Alarms as Part of Continuous Auditing

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

41) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. A ________ occurs when too many alarms are false positives.

1. A) Flood of alarms
2. B) Exception report
3. C) A negative event
4. D) Information overload

 

Answer:  A

Difficulty: 1 Easy

Topic:  Alarms and Exceptions

Learning Objective:  05-05 Evaluate Audit Alarms as Part of Continuous Auditing

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

42) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. A ________ occurs when a normal transaction is classified as problematic.

1. A) False negative
2. B) True negative
3. C) True positive
4. D) False positive

 

Answer:  D

Difficulty: 1 Easy

Topic:  Alarms and Exceptions

Learning Objective:  05-05 Evaluate Audit Alarms as Part of Continuous Auditing

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

43) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. A ________ occurs when an abnormal transaction is classified as problematic.

1. A) False negative
2. B) True negative
3. C) True positive
4. D) False positive

 

Answer:  C

Difficulty: 1 Easy

Topic:  Alarms and Exceptions

Learning Objective:  05-05 Evaluate Audit Alarms as Part of Continuous Auditing

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

44) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. A ________ occurs when a normal transaction is not classified as problematic.

1. A) False negative
2. B) True negative
3. C) True positive
4. D) False positive

 

Answer:  B

Difficulty: 1 Easy

Topic:  Alarms and Exceptions

Learning Objective:  05-05 Evaluate Audit Alarms as Part of Continuous Auditing

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

45) Continuous auditing relies heavily on alarms, which are essentially notifications of a classification problem. ________ is an abnormal transaction is not classified as problematic.

1. A) False negative
2. B) True negative
3. C) True positive
4. D) False positive

 

Answer:  A

Difficulty: 1 Easy

Topic:  Alarms and Exceptions

Learning Objective:  05-05 Evaluate Audit Alarms as Part of Continuous Auditing

Bloom’s:  Remember

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

46) A ________ is a repository of data accumulated from internal and external data sources, including financial data, to help management decision making.

1. A) flat file
2. B) data warehouse
3. C) homogenous system
4. D) heterogeneous system

 

Answer:  B

Difficulty: 2 Medium

Topic:  Auditing Data

Learning Objective:  05-02 Evaluate an Audit Plan

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

47) Chapter 5 discusses the essential properties of working papers. With respect to data analytics, working papers should contain the following items except:

1. A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
2. B) evidence, including performance evaluations, of the competency of the auditors completing the working paper.
3. C) database maps and data dictionaries that define the location and types of data auditors will analyze
4. D) documentation about existing automated controls, including parameters and variables used for analysis

 

Answer:  B

Difficulty: 2 Medium

Topic:  Working Papers and Audit Work Flow

Learning Objective:  05-06 Understand Working Paper Platforms

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

48) Chapter 5 discusses the essential properties of working papers. With respect to data analytics, working papers should contain the following items except:

1. A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
2. B) evidence, including data extracts, transformed data, and model output that provides support for the functioning controls and management assertions.
3. C) superseded drafts of working papers or financial statements, notes that reflect incomplete or preliminary thinking, previous copies of documents corrected for typographical or other errors, and duplicates of documents.
4. D) documentation about existing automated controls, including parameters and variables used for analysis

 

Answer:  C

Difficulty: 2 Medium

Topic:  Working Papers and Audit Work Flow

Learning Objective:  05-06 Understand Working Paper Platforms

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

 

49) Chapter 5 discusses the essential properties of working papers. With respect to data analytics, working papers should contain the following items except:

1. A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
2. B) IT-related documentation, including flowchart and process maps that provide system understanding
3. C) database maps and data dictionaries that define the location and types of data auditors will analyze
4. D) memos to future auditors documenting issues with problem members of the client’s management team

 

Answer:  D

Difficulty: 2 Medium

Topic:  Working Papers and Audit Work Flow

Learning Objective:  05-06 Understand Working Paper Platforms

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making

 

50) Chapter 5 discusses the essential properties of working papers. With respect to data analytics, working papers should contain the following items except:

1. A) work programs used to document the audit procedures to collect, manipulate, model, and evaluate data
2. B) IT-related documentation, including flowchart and process maps that provide system understanding
3. C) database maps and data dictionaries that define the location and types of data auditors will analyze
4. D) documentation of every matter considered during the audit.

 

Answer:  D

Difficulty: 2 Medium

Topic:  Working Papers and Audit Work Flow

Learning Objective:  05-06 Understand Working Paper Platforms

Bloom’s:  Understand

AACSB:  Reflective Thinking

AICPA:  BB Leveraging Technology; FN Leveraging Technology; FN Decision Making