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Audit Chp. 8 45 terms itzselena2

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Two types of software system software

used by a computer application software
system

A librarian should files & programs

maintain custody of
what?

Two types of programmed

application control
application control
manual
activities

What is the only type the operations manual - it contains the processing
of program instructions
documentation that
should be provided
to the computer
operator?

Echo Check a receiving device sends a message back to the

sending device that verifies a transmission

validity test an input validation check that involves the comparison

of an account number against a master file of account
numbers to test its authenticity

item counts prevents the loss of a transaction during the

processing of data

passwords prevents the alteration of data by an unauthorized

terminal user

limit tests prevents the processing of a transaction that is

unreasonable in amount

self-checking prevents an error when entering an account number

numbers

internal file label prevents an update of the wrong master file of

accounts

parity check prevents the loss of data as it is processed internally

by the computer

locking operating prevents the unauthorized entry of data after business

switch hours

private lines prevents the interception of data when it is transmitted

What is the principal CPU - includes the control unit, the internal storage
hardware component unit, & the arithmetic logic unit
in an IT system?
in an IT system?

What hardware input devices

components are output devices
peripheral to the auxiliary storage devices
principal hardware
components?

nature & function of consists of programs & routines that facilitate the
computer software operation of a computer

systems programs perform generalized functions for one or more

applications

application programs contains instructions that enable the user to perform

data processing tasks for specific applications

traditional file for separate files of data are created for each processing
organizing data application - the files are organized into master files &
transaction files

database methods for stores all data in one central file & allows each user
organizing data access to the portion that is needed

sequential methods files are arranged sequentially & transaction data are
of data processing sequenced before processing - the entire file must be
read by a computer each time the transaction is
processed

direct access file data are not maintained in any order - it is not
processing necessary to read the entire file in updating

advantages of 1. consistency
computer processing 2. more timely reports may provide management with
over manual systems more effective means of analyzing, reviewing &
supervising

risks of computer 1. may produce a transaction trail that isn't available for
processing over very long
manual systems 2. less documentary evidence

3. files/records are normally in machine-sensible form

 3. files/records are normally in machine-sensible form
which can only be read with a computer
4. more vulnerable to physical disaster, unauthorized
manipulation, & mechanical malfunction
5. changes in the system - more difficult to implement
& control

computer application procedures designed to control the transactions -

controls (subcategory purpose is to control the completeness & accuracy
of information &
processing controls)

computer general designed to control computer applications - purpose

controls (subcategory is to control program development, program changes,
of information & computer operations, & to secure access to programs
processing controls) & data

What risks do risks related to authorization, completeness, &

information & accuracy
processing controls
address?

5 types of general organization/operation controls

controls system development & document controls
hardware & system software controls
access controls
data/procedural controls

What are the general they all pertain to the IT environment & all IT activities
controls' common
attribute?

documentation relate to the document & records maintained by a

controls company

Why is it provides the primary source of information about

documentation the flow of transactions through the system
important to
management & the
auditor?
What items should be descriptions & flowcharts
included in IT operation instructions
documentation? control procedures for operators/users
descriptions & samples of required inputs/outputs

purposes & nature of prevents unauthorized use of IT equipment, data files,

access controls & computer programs
they accomplish this through the use of physical
access controls, passwords, & procedural safeguards

A problem for a CPA the audit trail is sometimes generated only in machine-
associated with readable form
advanced IT systems
is that:

An example of an password
access control

What is not a valid "the controls appear adequate"

reason for choosing
to omit performing
certain tests of
controls related to
the control activities
within the computer
portion of the client's
internal control?

General controls over observation, inspection & inquiry

IT systems are
typically tested using:

Passwords for unauthorized use of the software

microcomputer
software programs
are designed to
prevent:
What is likely to be of the cost/benefit of data processing operations
least importance to
an auditor
considering the
internal control in a
company with
computer
processing?

What would the programmers are allowed access to the file library
auditors consider to
be a weakness in an IT
system?

What constitutes a machine operators are supervised by the programmer

weakness in the
internal control of a
computer system?

The purpose of using records

generalized
computer programs is
to test & analyze a
client's computer:

What is an example of hash total

an application
control?

Auditing through the processing is primarily online & updating is real-time

computer is most
likely to be used
when: