CIA Exam 1.3 - Internal Audit Tools and
Techniques Questions with Correct Answers
Nonsampling Risk Correct Answ_arises even if the entire population is tested and is due to
errors in auditor judgement, such as use of inappropriate audit procedures and not recognizing
errors during sampling. (can be controlled by better audit planning and supervision)
Risk of incorrect rejection Correct Answ_risk that the sample supports the conclusion that
the recorded account balance is materilaly misstated when it is not materially misstated.
Risk of incorrect acceptance Correct Answ_risk that the sample supports the conclusion that
the recorded account balance is NOT materilaly misstated when it is materially misstated.
Risk of Overreliance Correct Answ_risk that the sample supports the auditor's planned
degree of reliance on the control when the true compliance rate does not justify such reliance
Risk of underreliance Correct Answ_risk that the sample does not support the auditor's
planned degree of reliance on the control when the true compliance rate supports such reliance
,Critical errors Correct Answ_cannot be tolerated (errors caused by deliberate falsification of
transactions or account balances)
Noncritical errors Correct Answ_exceptions that have a lesser impact (clerical or typing
errors)
Foot Correct Answ_adding a column of numbers
Crossfoot Correct Answ_verify sum of totals in various columns agrees to grand total
Hash total Correct Answ_method for ensuring accuracy of processed data. It is the total of
several fields of data in a file (including fields not normally used in calculations, such as account
number). At various stages in the processing, the hash total is recalculated and compared with
original.
Integrated Test Facility Correct Answ_process TEST data through LIVE programs
Parallel Simulation Correct Answ_process LIVE data thorugh TEST programs
, SCARF Correct Answ_System Control Audit Review File (embedded audit module)
Embedded audit modules Correct Answ_data collection modules embedded in the computer
application system to select and record data for subsequent analysis and evalution
4GLs (Fourth-Generation Programming Language) Correct Answ_programming language to
make inquiries against online data files. Easier to use than 3GLs
Audit hooks Correct Answ_computer programs used in high-risk systems and are triggered
by a condition or event desgined by the auditor in conjunction with the IS staff and user.
Objective is to act before an error, abnormality, or irregularity gets out of hand. (similar to red
flags)
Extended records Correct Answ_technique that collects (by means of special program) all
significant data that have affected the processing of an individual transaction. One file with all
data across multiple computer systems related to processing a transaction.
Generalized Audit Software Correct Answ_general (off the shelf) software that is reliable,
highly flexible, and extensively and accurately documented for versitle audit applications
Techniques Questions with Correct Answers
Nonsampling Risk Correct Answ_arises even if the entire population is tested and is due to
errors in auditor judgement, such as use of inappropriate audit procedures and not recognizing
errors during sampling. (can be controlled by better audit planning and supervision)
Risk of incorrect rejection Correct Answ_risk that the sample supports the conclusion that
the recorded account balance is materilaly misstated when it is not materially misstated.
Risk of incorrect acceptance Correct Answ_risk that the sample supports the conclusion that
the recorded account balance is NOT materilaly misstated when it is materially misstated.
Risk of Overreliance Correct Answ_risk that the sample supports the auditor's planned
degree of reliance on the control when the true compliance rate does not justify such reliance
Risk of underreliance Correct Answ_risk that the sample does not support the auditor's
planned degree of reliance on the control when the true compliance rate supports such reliance
,Critical errors Correct Answ_cannot be tolerated (errors caused by deliberate falsification of
transactions or account balances)
Noncritical errors Correct Answ_exceptions that have a lesser impact (clerical or typing
errors)
Foot Correct Answ_adding a column of numbers
Crossfoot Correct Answ_verify sum of totals in various columns agrees to grand total
Hash total Correct Answ_method for ensuring accuracy of processed data. It is the total of
several fields of data in a file (including fields not normally used in calculations, such as account
number). At various stages in the processing, the hash total is recalculated and compared with
original.
Integrated Test Facility Correct Answ_process TEST data through LIVE programs
Parallel Simulation Correct Answ_process LIVE data thorugh TEST programs
, SCARF Correct Answ_System Control Audit Review File (embedded audit module)
Embedded audit modules Correct Answ_data collection modules embedded in the computer
application system to select and record data for subsequent analysis and evalution
4GLs (Fourth-Generation Programming Language) Correct Answ_programming language to
make inquiries against online data files. Easier to use than 3GLs
Audit hooks Correct Answ_computer programs used in high-risk systems and are triggered
by a condition or event desgined by the auditor in conjunction with the IS staff and user.
Objective is to act before an error, abnormality, or irregularity gets out of hand. (similar to red
flags)
Extended records Correct Answ_technique that collects (by means of special program) all
significant data that have affected the processing of an individual transaction. One file with all
data across multiple computer systems related to processing a transaction.
Generalized Audit Software Correct Answ_general (off the shelf) software that is reliable,
highly flexible, and extensively and accurately documented for versitle audit applications
