Students should practice these Audit in an Automated Environment – CA Inter Audit MCQ based on the latest syllabus.
Audit in an Automated Environment – CA Inter Audit MCQ
Question 1.
Type of automated environment in which business operations and transactions are initiated, processed and recorded immediately on their occurrence
(a) Real Time processing
(b) Batch processing
(c) Time Sharing processing
(d) Service Bureau processing
Answer:
(a) Real Time processing
Question 2.
As required by SA 315, auditor is required to obtain an understanding of the entity and its environment as a part of Risk Assessment procedure to identify and assess Risk of Material Misstatements. Given below is list of certain areas for which auditor generally required understanding:
(i) Applications being used by the entity.
(ii) IT infrastructure components for each of the application.
(iii) Organisation structure and governance.
(iv) Policies, procedures and processes followed,
(v) IT risks and controls.
In an automated environment, auditor is required to obtain an understating of:
(a) (i), (ii) and (v)
(b) (iii) and (iv)
(c) (i) (ii) (iii) and (v)
(d) (i) (ii) (iii) (iv) and (v)
Answer:
(d) (i) (ii) (iii) (iv) and (v)
Question 3.
Which of the following are not general IT controls?
(a) Controls over data centre and network operations
(b) Back-up and recovery
(c) Edit checks of input data
(d) System software acquisition
Answer:
(c) Edit checks of input data
Question 4.
Which of the following are not application controls?
(a) Access security
(b) Numerical sequence checks
(c) Edit Checks of Input Data
(d) Reasonable Checks
Answer:
(a) Access security
Question 5.
Policies and procedures that relate to many applications and support the effective functioning of application controls are known as
(a) General IT Controls
(b) Application Controls
(c) IT Dependent Controls
(d) None of the above
Answer:
(a) General IT Controls
Question 6.
Which of the following is a General IT control?
(a) IT Environment
(b) Application Control
(c) Access Security
(d) IT Dependent Control
Answer:
(c) Access Security
Question 7.
Which of the following is an automated control?
(a) Program change
(b) System-generated report
(c) Application control
(d) Configurations
Answer:
(d) Configurations
Question 8.
Application controls are that typically operate at a business process level and apply to the processing of individual applications
(a) Manual procedures
(b) Automated procedures
(c) Manual or Automated procedures
(d) None of the above
Answer:
(c) Manual or Automated procedures
Question 9.
Manual controls that make use of some form of data or information or report produced from IT systems and applications are known as:
(a) General IT Controls
(b) Automated Application Controls
(c) IT Dependent Controls
(d) None of the above
Answer:
(c) IT Dependent Controls
Question 10.
Identify the automated controls from below mentioned cases:
(a) All changes to the credit limit are approved manually by sales manager
(b) Price master configured in the sales master can only be edited by authorised personnel in the system
(c) Inventory ageing report is pulled out from the system based on which provisioning is calculated after analysing the future demand by the inventory personnel and approved by the controller
(d) All invoices are signed by warehouse personnel before the goods are dispatched to the customer
Answer:
(b) Price master configured in the sales master can only be edited by authorised personnel in the system
Question 11.
Identify the IT Dependent controls:
1. Price master configured in the sales master can only be edited by authorised personnel in the system
2. Invoice can not be booked in SAP in case Purchase orders are not approved
3. All invoices are signed by warehouse personnel before the goods are dispatched to the customer
4. Inventory ageing report is pulled out from the system based on which provisioning is calculated after analysing the future demand by the inventory personnel and approved by the controller
5. Credit limit is assigned to the customer and goods cannot be sold in excess of credit limit configured in the system
6. Ageing report is pulled out from SAP based on which provisioning is calculated by accounting personnel and approved by financial controller
Correct Answer is:
(a) 1, 2, 3 and 4
(b) 2, 3 and 4
(c) 4 and 6
(d) 4, 5 and 6
Answer:
(c) 4 and 6
Question 12.
Identify the Automated controls:
1. Price master configured in the sales master can only be edited by authorised personnel in the system
2. Invoice cannotbe booked in SAP in case Purchase orders are not approved
3. Inventory ageing report is pulled out from the system based on which provisioning is calcu-lated after analysing the future demand by
the inventory personnel and approved by the controller
4. All invoices are signed by warehouse personnel before the goods are dispatched to the customer
5. Credit limit is assigned to the customer and goods cannot be sold in excess of credit limit configured in the system
6. All changes to the credit limit are approved manually by sales manager
Correct Answer is:
(a) 1, 2 and 3
(b) 1, 2 and 4
(c) 1, 2 and 5
(d) 1, 2 and 6
Answer:
(c) 1, 2 and 5
Question 13.
Which controls help ensure that transactions occurred are authorised and are completely and accurately recorded and processed?
(a) General IT Controls
(b) Application Controls
(c) IT Dependent Controls
(d) None of the above
Answer:
(b) Application Controls
Question 14.
IT dependent controls are:
(a) Manual Controls
(b) Automated Controls
(c) Manual or Automated Controls
(d) None of the above
Answer:
(a) Manual Controls
Question 15.
Examples of Application controls include the following:
1. Edit checks and Validation of input data
2. Sequence Number checks
3. Limit Checks
4. Access security
5. Application system acquisition, development, and maintenance
Correct Answer is:
(a) 1, 2 and 3
(b) 1, 2, 3 and 4
(c) 4 and 5
(d) 1,2, 3 and 5
Answer:
(a) 1, 2 and 3
Question 16.
Examples of General IT controls include the following:
1. Edit checks and Validation of input data
2. Sequence Number checks
3. Limit Checks
4. Access security
5. Application system acquisition, development, and maintenance
Correct Answer is:
(a) 1,2 and 3
(b) 1, 2, 3 and 4
(c) 4 and 5
(d) 1, 2, 3 and 5
Answer:
(c) 4 and 5
Question 17.
Who is mainly responsible for implementation of internal financial controls in a company?
(a) Auditors
(b) Directors
(c) Employees
(d) Regulators
Answer:
(b) Directors
Question 18.
Analytical process by which meaning information is generated and prepared from raw system data using processes, tools and techniques is known as:
(a) Substantive Analytical Procedures
(b) Data Analytics
(c) Data Monitoring
(d) Modelling tool
Answer:
(b) Data Analytics
Question 19.
The data analytics methods used in an audit are known as
(o) Test Data
(b) Integrated Test Facility
(c) Computer Assisted Auditing Techniques or CAATs
(d) Data Base Management System
Answer:
(c) Computer Assisted Auditing Techniques or CAATs
Question 20.
Arrange the steps involved in using Data Analytics:
| Arrange the steps involved in using Data Analytics: | |||
| A | Document the results &Report the conclusions. | E | Understand Business Environment including IT. |
| B | Apply Criteria on data extracted. | F | Extract Data |
| C | Validate and Confirm results | G | Identify Source and Format of Data |
| D | Verily, Completeness, accuracy and Validity of extracted Data | H | Defines the Objectives and Criteria against which subject matter will be evaluated. |
(a) E, H, F, G, B, D, A and C
(b) E, H,G, F, D, B.C and A
(c) H, G, F, B, E, D, A and C
(d) H, G, F, B, E, D, C and A
Answer:
(b) E, H,G, F, D, B.C and A