ACCT 3222 MC Textbook Questions with
Correct Answers
A software application will not allow a sale to be processed if a customer is over its
credit limit. This is an example of:
A. a detective control.
B. a preventive control.
C. an IT general control.
D. an IT-dependent manual control.
B. a preventive control
The software application compares all sales invoices with underlying shipping
information on the bills of lading and packing slips with sales invoices. If differences are
revealed, a report is generated for review and follow-up by the billing supervisor. This
is an example of:
A. a detective control.
B. a preventive control.
C. an IT general control.
D. an IT-dependent manual control.
A. a detective control.
ITGCs are important because they:
A. prevent unauthorized personnel from having access to data and applications.
B. impact the effectiveness of manual controls.
,C. prevent the reliability of electronic audit evidence.
D. allow client staff to change programs without needing to receive authorization for the
change.
A. prevent unauthorized personnel from having access to data and applications.
Which of the following represents an example of an IT application control?
A. The assistant controller performs a monthly bank reconciliation and follow-up of
unexpected outstanding items.
B. The accounts receivable manager reviews credit balances in accounts receivable
quarterly to determine their causes.
C. The software application compares all sales invoices with underlying shipping
information on the bills of lading and packing slips with sales invoices. If differences are
revealed, a report is generated for review and follow-up by the billing supervisor.
D. All changes to software applications must be reviewed and approved by the
department affected by the application.
C. The software application compares all sales invoices with underlying shipping information
on the bills of lading and packing slips with sales invoices. If differences are revealed, a
report is generated for review and follow-up by the billing supervisor.
An auditor is going to test the client's controls over bank reconciliations. The auditor
will perform which of the following audit procedures for this test of controls?
, A. Software-based audit techniques using test data.
B. Inquiry of the person performing the bank reconciliation.
C. Reperformance of the bank reconciliation procedure.
D. Inquiry of the person performing the bank reconciliation and reperformance of the
bank reconciliation procedure.
D. Inquiry of the person performing the bank reconciliation and reperformance of the bank
reconciliation procedure.
The auditor decides which controls to test by considering:
A. the points at which error or fraud can occur.
B. the nature of controls implemented by management.
C. the significance of each control in achieving its control objective.
D. All of the answer choices are correct.
D. All of the answer choices are correct.
When obtaining an understanding of internal controls, the auditor identifies important
programmed application controls over the occurrence of sales. However, the auditor
has serious concerns about the adequacy of the control environment due to a weak tone
at the top about control consciousness. Which of the following best describes how the
auditor should respond to this situation when planning tests of controls related to the
occurrence of sales?
A. The auditor could assess control risk as low for an assertion after performing
software-based audit techniques on controls relevant to that assertion.
Correct Answers
A software application will not allow a sale to be processed if a customer is over its
credit limit. This is an example of:
A. a detective control.
B. a preventive control.
C. an IT general control.
D. an IT-dependent manual control.
B. a preventive control
The software application compares all sales invoices with underlying shipping
information on the bills of lading and packing slips with sales invoices. If differences are
revealed, a report is generated for review and follow-up by the billing supervisor. This
is an example of:
A. a detective control.
B. a preventive control.
C. an IT general control.
D. an IT-dependent manual control.
A. a detective control.
ITGCs are important because they:
A. prevent unauthorized personnel from having access to data and applications.
B. impact the effectiveness of manual controls.
,C. prevent the reliability of electronic audit evidence.
D. allow client staff to change programs without needing to receive authorization for the
change.
A. prevent unauthorized personnel from having access to data and applications.
Which of the following represents an example of an IT application control?
A. The assistant controller performs a monthly bank reconciliation and follow-up of
unexpected outstanding items.
B. The accounts receivable manager reviews credit balances in accounts receivable
quarterly to determine their causes.
C. The software application compares all sales invoices with underlying shipping
information on the bills of lading and packing slips with sales invoices. If differences are
revealed, a report is generated for review and follow-up by the billing supervisor.
D. All changes to software applications must be reviewed and approved by the
department affected by the application.
C. The software application compares all sales invoices with underlying shipping information
on the bills of lading and packing slips with sales invoices. If differences are revealed, a
report is generated for review and follow-up by the billing supervisor.
An auditor is going to test the client's controls over bank reconciliations. The auditor
will perform which of the following audit procedures for this test of controls?
, A. Software-based audit techniques using test data.
B. Inquiry of the person performing the bank reconciliation.
C. Reperformance of the bank reconciliation procedure.
D. Inquiry of the person performing the bank reconciliation and reperformance of the
bank reconciliation procedure.
D. Inquiry of the person performing the bank reconciliation and reperformance of the bank
reconciliation procedure.
The auditor decides which controls to test by considering:
A. the points at which error or fraud can occur.
B. the nature of controls implemented by management.
C. the significance of each control in achieving its control objective.
D. All of the answer choices are correct.
D. All of the answer choices are correct.
When obtaining an understanding of internal controls, the auditor identifies important
programmed application controls over the occurrence of sales. However, the auditor
has serious concerns about the adequacy of the control environment due to a weak tone
at the top about control consciousness. Which of the following best describes how the
auditor should respond to this situation when planning tests of controls related to the
occurrence of sales?
A. The auditor could assess control risk as low for an assertion after performing
software-based audit techniques on controls relevant to that assertion.
