Test Bank for Information Technology Auditing, 4th Edition by James A. Hall ISBN.pdf

IT Auditing 4th Ed—Test Bank, Chapter
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Test Bank for Information Technology Auditing, 4th Edition
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by James A. Hall ISBN
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Chapter 1—Auditing and Internal Control
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TRUE/FALSE

1. Corporate management (including the CEO) must certify monthly and annually their
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organization‟s internal controls over financial reporting.
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ANS: G F PTS: G G 1

2. Both the SEC and the PCAOB require management to use the COBIT framework for assessing
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internal control adequacy.
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ANS: G F PTS: G G 1

3. Both the SEC and the PCAOB require management to use the COSO framework for assessing
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internal control adequacy.
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ANS: G F PTS: G G 1

4. A qualified opinion on management‟s assessment of internal controls over the financial reporting
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system necessitates a qualified opinion on the financial statements?
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ANS: G F PTS: G G 1

5. The same internal control objectives apply to manual and computer-based information systems.
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ANS: G T PTS: G G 1

6. The external auditor is responsible for establishing and maintaining the internal control system.
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ANS: G F PTS: G G 1

7. Segregation of duties is an example of an internal control procedure.
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management system for classroom use.

, IT Auditing 4th Ed—Test Bank, Chapter
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1
ANS: G T PTS: G G 1


8. Preventive controls are passive techniques designed to reduce fraud.
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ANS: G T PTS: G G 1

9. A key modifying assumption in internal control is that the internal control system is the
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responsibility of management.
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ANS: G T PTS: G G 1




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Gas Gpermitted Gin Ga G license Gdistributed Gwith Ga Gcertain Gproduct Gor Gservice Gor Gotherwise Gon Ga Gpassword-protected Gwebsite Gor Gschool-approved Glearning

management system for classroom use.

, IT Auditing 4th Ed—Test Bank, Chapter
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1




10. While the Sarbanes-Oxley Act prohibits auditors from providing non-accounting services to their
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audit clients, they are not prohibited from performing such services for non-audit clients or
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privately held companies.
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ANS: G T PTS: G G 1

11. The Sarbanes-Oxley Act requires the audit committee to hire and oversee the external auditors.
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ANS: G T PTS: G G 1

12. Section 404 requires that corporate management (including the CEO) certify their organization‟s
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internal controls on a quarterly and annual basis.
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ANS: G F PTS: G G 1

13. Section 302 requires the management of public companies to assess and formally report on
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the effectiveness of their organization‟s internal controls.
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ANS: G F PTS: G G 1


14. Application controls apply to a wide range of exposures that threaten the integrity of all
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programs processed within the computer environment.
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ANS: G F PTS: G G 1

15. Advisory services is an emerging field that goes beyond the auditor‟s traditional attestation function.
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ANS: G T PTS: G G 1

16. An IT auditor expresses an opinion on the fairness of the financial statements.
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ANS: G F PTS: G G 1

17. External auditing is an independent appraisal function established within an organization to examine
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and evaluate its activities as a service to the organization.
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ANS: G F PTS: G G 1

18. External auditors can cooperate with and use evidence gathered by internal audit departments that
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are organizationally independent and that report to the Audit Committee of the Board of
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© G2016 GCengage GLearning®. G May Gnot Gbe Gscanned, Gcopied Gor Gduplicated Gor Gposted Gto Ga Gpublicly Gaccessible Gwebsite, Gin Gwhole Gor Gin Gpart, Gexcept Gfor Guse
Gas Gpermitted Gin Ga G license Gdistributed Gwith Ga Gcertain Gproduct Gor Gservice Gor Gotherwise Gon Ga Gpassword-protected Gwebsite Gor Gschool-approved Glearning

management system for classroom use.

, IT Auditing 4th Ed—Test Bank, Chapter
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© G2016 GCengage GLearning®. G May Gnot Gbe Gscanned, Gcopied Gor Gduplicated Gor Gposted Gto Ga Gpublicly Gaccessible Gwebsite, Gin Gwhole Gor Gin Gpart, Gexcept Gfor Guse
Gas Gpermitted Gin Ga G license Gdistributed Gwith Ga Gcertain Gproduct Gor Gservice Gor Gotherwise Gon Ga Gpassword-protected Gwebsite Gor Gschool-approved Glearning

management system for classroom use.