Term
| What is the primary objective and responsibility of the external auditor? |
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Definition
| The primary objective and responsibility of the external auditor is to attest to the fairness of a firm’s financial reports. |
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Term
| What are the steps for the Auditing Around the Computer method? |
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Definition
Accounting System
- Input
- Processing
- Output |
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Term
| What are 3 facts about the Auditing Around the Computer method? |
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Definition
- Totals are accumulated for accepted and rejected records.
- Auditors emphasize control over rejected transactions, their correction, and then re-submission.
- The around-the-computer approach is no longer widely used. |
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Term
| What is Auditing Through the Computer? |
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Definition
| Auditing through the computer may be defined as the verification of controls in a computerized system. |
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Term
| What does the Control Frame Work Diagram look like? |
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Definition
A) Internal Controls
1)Applications controls
a) Computer application systems and programs
2) General Controls
a) Application systems
b) Computer service center |
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Term
| What is Auditing With the Computer? |
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Definition
| Auditing with the computer is the process of using information technology in auditing. The use of information technology is no longer optional, it is essential! |
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Term
| What does Risk-Based Auditing provide assurance of? |
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Definition
| It provides assurance on the effectiveness of the organization’s Enterprise Risk Management and that risks are being managed according to the organization’s risk appetite. |
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Term
| What does Risk-Based Auditing evaluate? |
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Definition
| RBA evaluates whether management has effective processes for identifying, classifying, scoring, and treating important risks with internal controls. |
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Term
| What are 3 facts of Information Systems Technology? |
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Definition
- Information system audit technology has evolved along with computer system development.
- There is no one overall auditing technology.
- Rather, there is a variety of tools and techniques that may be used to accomplish an audit’s objective. |
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Term
| What is Test Data Technique and an example of one? |
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Definition
Test data are input containing both valid and invalid data.
Example: Payroll transactions for fictitious employees are processed concurrently with valid payroll transactions. |
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Term
| What are the four steps of the Test Data Approach? |
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Definition
1) Test data hypothetical transactions
2) Computer processing using master program
3) Error listing
(compared to)
4) Auditor’s expected output |
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Term
| What is Integrated-Test-Facility Technique and an example? |
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Definition
ITF involves both the use of test data and the creation of fictitious records (vendors, employees)on the master files of a computer system.
An example is Payroll transactions for fictitious employees are processed concurrently with valid
payroll transactions. |
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Term
| What is the Parallel Simulation Technique and an example? |
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Definition
It is the processing of real data through audit programs. The simulated output and the regular output are then compared.
An example would be Depreciation calculations are verified by processing the fixed-asset master file with an audit program. |
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Term
| What is the Audit Software Technique and an example? |
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Definition
Computer programs that permit the computer to be used as an auditing tool.
An example would be an auditor uses a computer program to extract data records from a master file. |
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Term
| What is Generalized Audit Software (GAS) technique and an example? |
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Definition
GAS is audit software that has been specifically designed to allow auditors to perform audit-related data processing functions.
An example would be an auditor uses GAS to search computer files for unusual items. |
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Term
| What is the PC Software Technique and an example? |
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Definition
Software that allows the auditor to use a PC to perform audit tasks.
An example would be A PC spreadsheet package is used to maintain audit working papers and audit schedules. |
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Term
| What is the Embedded Audit Routines Technique and an example? |
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Definition
Special auditing routines included in regular computer programs so that transaction data can be subjected to audit analysis.
An example is Data items that are exceptions to auditor-specified edit tests included in a program are written to a special audit file. |
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Term
| What is the Tracing Technique and what is an example? |
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Definition
Tracing provides a detailed audit trail of the instructions executed during the program’s operation.
An example is A payroll program is traced to determine if certain edit tests are performed in the correct order. |
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