M1C23

What is one of the key tests which can be ideally carried out using Computer Assisted Audit Tools (CAATs)?

• Identification of exceptional transactions based upon set criteria
• Projections on future trends for specific parameters
• Carrying out employees’ reference checks
• Carry out employee appraisals Key

Answer explanation

One of the many key tests that can be carried out by CAATs is identification of exceptional transactions based upon set criteria. The IS auditor can set the criteria based upon the sort of transactions which are not expected to occur on the basis of the controls which presumably have been incorporated in the organization’s systems. CAATs are more in the nature of audit tools & would not be ideal for the other purposes listed in Options B to D above. Hence, answer at Option A alone is correct.

Find out the best process carried out using Computer Assisted Audit Tools (CAATs)?

• Carry out employee appraisals of Information Systems Assurances Services
• Identify potential areas of fraud
• Projections on future trends for specific parameters
• Carrying out employees’ reference checks Key

Answer explanation

One of the many key tests that can be carried out by CAATs is identification of potential areas of fraud. The IS auditor can set the criteria based upon the sort of transactions which are not expected to occur on the basis of presumably have been incorporated in the organization’s systems. CAATs are more in the nature of audit tools & would not be ideal for the other purposes listed in Options A, C and D above.

What can be ideally carried out using Computer Assisted Audit Tools (CAATs)?

• Carry out employee appraisals
• Projections on future trends for specific parameters
• Identify data which is inconsistent or erroneous
• Carrying out employees’ reference checks Key.

Answer explanation

One of the many key tests that can be carried out by CAATs is identification of data which is inconsistent or erroneous. The IS auditor can set the criteria based upon the sort of data which are not expected to occur on the basis of the controls which presumably have been incorporated in the organization’s systems. CAATs are more in the nature of audit tools & would not be ideal for the other purposes listed in Options A, B and D above. Hence, option C is correct.

What is one of the key tests which can be ideally carried out using Computer Assisted Audit Tools?

• Carry out employee appraisals
• Projections on future trends for specific parameters
• Carrying out employees’ reference checks Key
• Perform various types of statistical analysis

Answer explanation

One of the many key tests that can be carried out by CAATs is the carrying out of various types of statistical analysis which could throw up areas of inconsistencies, defaults, etc. CAATs are more in the nature of audit tools & would not be ideal for the other purposes listed in Options A to C above. Hence, option D is correct.

What is one of the key tests which can be ideally carried out using Computer Assisted Audit Tools?

• Establishing whether the set controls are working as prescribed
• Carry out employee appraisals
• Projections on future trends for specific parameter
• Estimation of competitor activity Key.

Answer explanation

One of the many key tests that can be carried out by CAATs is establishing whether the set controls are working as intended. CAATs are more in the nature of audit tools & would not be ideal for the other purposes listed in Options B to D above. Hence, answer at Option A alone is correct.

What is one of the key tests which can be ideally carried out using Computer Assisted Audit Tools (CAATs)?

• Carry out market surveys for a new product launch
• Establishing relationship between two or more areas & identify duplicate transactions
• Projections on future trends for specific parameters
• Estimation of competitor activity Key.

Answer explanation

One of the many key tests that can be carried out by CAATs is establishing relationship between two or more areas & identify duplicate transactions. CAATs are more in the nature of audit tools & would not be ideal for the other purposes listed in Options A, C and D above. Hence, option B alone is correct.

Which is one of the most effective tools and techniques to combat fraud?

• Computer Assisted Audit Techniques (CAAT)
• Threats of severe punishment
• Validation by the I.T. dept. of the police
• Use of authenticated hard copies Key

Answer explanation

CAAT is one of the tools useful for carrying out the detection of suspicious transactions as a pre-emptive or post fraud activity. Hence, answer at Option A is correct.

An IS Auditor, concerned that application controls are not adequate to prevent duplicate payment of invoices, decided to review the data processing files for possible duplicate payments. Which of the following techniques/tools would be useful to the IS Auditor?

• An integrated test facility.
• Statistical sampling.
• Generalized audit software.
• The Audit Review File.

Answer explanation

Generalized Audit software is mainly used to find duplicate data. Options A and D are on line application audit tools and statistical sampling may not be able to find duplicates.

Many automated tools are designed for testing and evaluating computer systems. Which one of the following such tools impact the systems performance with a greater load and stress on the system?

• Test data generators
• Statistical software packages
• Test drivers
• Network traffic analyzers

Answer explanation

Statistical software packages use all data resources impacting the processing time and response time. Network traffic analyzers also use the system resources but not putting stress on production data. Test data generator is not resource intensive and test drivers are for specific use without impacting much resources.

The most appropriate type of CAAT tool the auditor should use to test security configuration settings for the entire application systems of any organization is:

• Generalized Audit Software
• Test Data
• Utility Software
• Expert System

Answer explanation

Statistical software packages use all data resources impacting the processing time and response time. Network traffic analyzers also use the system resources but not putting stress on production data. Test data generator is not resource intensive and test drivers are for specific use without impacting much resources. Correct answer is C