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Multiple Choices Questions

The document contains 20 multiple choice questions that assess knowledge of computer-assisted audit techniques (CAATs) and technologies. The questions cover topics such as advantages of CAATs, examples of CAATs, how CAATs can help with fraud detection and audit sampling, benefits of electronic audit workpapers, audit analytics, audit trails, regression analysis, and challenges of implementing CAATs/continuous monitoring.

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Lady Crystal Rosales
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We take content rights seriously. If you suspect this is your content, claim it here.
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59 views4 pages

Multiple Choices Questions

The document contains 20 multiple choice questions that assess knowledge of computer-assisted audit techniques (CAATs) and technologies. The questions cover topics such as advantages of CAATs, examples of CAATs, how CAATs can help with fraud detection and audit sampling, benefits of electronic audit workpapers, audit analytics, audit trails, regression analysis, and challenges of implementing CAATs/continuous monitoring.

Uploaded by

Lady Crystal Rosales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1. Which of the following is an advantage of using CAATTs in the audit process?

a) Increased human errors


b) Limited scalability
c) Enhanced audit efficiency and effectiveness
d) Reduced reliance on data analysis
Answer: c) Enhanced audit efficiency and effectiveness

2. Which of the following is an example of a CAATT?


a) Microsoft Word
b) Adobe Photoshop
c) ACL (Audit Command Language)
d) Google Chrome
Answer: c) ACL (Audit Command Language)

3. Which of the following statements is true regarding CAATTs?


a) CAATTs are only useful for large organizations
b) CAATTs are incapable of handling unstructured data
c) CAATTs can help identify anomalies and trends in data
d) CAATTs are not compatible with common audit standards
Answer: c) CAATTs can help identify anomalies and trends in data

4. What is the primary benefit of using CAATTs for audit sampling?


a) Increased randomness in sample selection
b) Reduction of sample size needed
c) Manual selection for higher accuracy
d) Limited applicability to statistical sampling
Answer: b) Reduction of sample size needed

5. How does CAATT contribute to fraud detection in the audit process?


a) By ignoring anomalies in data
b) By relying solely on human judgment
c) By identifying unusual patterns and outliers
d) By avoiding data analysis altogether
Answer: c) By identifying unusual patterns and outliers

6. It refers to the application of advanced data analysis techniques and technology in the
field of auditing.
a. Audit Analytics
b. Electronic Audit Workpapers
c. Audit Command Language
d. Audit Trail Software
Answer: a. Audit Analytics

7. It refers to digital documents and files that auditors use to organize, store, and analyze
information during the audit process.
a. Audit Analytics
b. Electronic Audit Workpapers
c. Audit Command Language
d. Audit Trail Software
Answer: b. Electronic Audit Workpapers

8. A comprehensive record encompassing all events and actions within a system,


application, or network is known as an audit trail.
a. Audit Analytics
b. Electronic Audit Workpapers
c. Audit Command Language
d. Audit Trail Software
Answer: d. Audit Trail Software

9. It helps auditors optimize resources by allowing them to focus their efforts on a subset of
data rather than examining the entire population.
a. Sampling software
b. Data extraction tools
c. Data Transformation
d. Comprehensive analysis
Answer: a. Sampling software

10. A set of statistical methods used for the estimation of relationships between a
dependent variable and one or more independent variables.
a. Audit analytics
b. Regression analysis
c. Data Analysis
d. Data Transformation
Answer: b. Regression Analysis

11. Which of the following is NOT a significant advantage of Electronic Audit Workpapers
(EAW) over traditional paper-based documentation?

a. Increased efficiency
b. Enhanced collaboration
c. Improved accessibility
d. Reduced storage space
e. Greater risk of data loss
Answer: e. Greater risk of data loss
12. Which of the following is NOT a recommended practice for securing EAW?
a. Implementing strong access controls and user authentication protocols.
b. Regularly backing up EAW data to secure and redundant storage locations.
c. Encrypting sensitive information contained within EAW files.
d. Training and educating staff on EAW security best practices and potential
cybersecurity threats.
e. Utilizing open-source EAW software to maximize cost-effectiveness.

Answer: e. Utilizing open-source EAW software to maximize cost-effectiveness.

13. Which of the following is NOT a primary benefit of using Automated Testing
Scripts within a CAATs environment?
a. Reduced time spent on repetitive testing tasks.
b. Elimination of human error in test execution.
c. Guaranteed identification of all potential risks and errors.
d. Increased ability to test complex scenarios and large datasets.
e. Enhanced documentation and traceability of testing activities.

Answer: c. Guaranteed identification of all potential risks and errors.

14. What is the primary purpose of audit analytics in the field of auditing?
a. Generating financial reports
b. Identifying patterns, anomalies, and trends in financial information
c. Conducting employee performance reviews
d. Designing marketing strategies
Answer: b) Identifying patterns, anomalies, and trends in financial information

15. To ensure the effectiveness of Automated Testing Scripts:


a. Frequent revisions and updates are unnecessary.
b. Testing should be limited to high-frequency, routine transactions.
c. independent validation and review of scripts are crucial.
d. Auditors should solely rely on the script results for findings.
Answer: c. independent validation and review of scripts are crucial.

16. What does an audit trail record primarily track within a system, application, or
network?
a. Only financial transactions
b. Only user login activities
c. All events and actions
d. Only external communications
Answer: c) All events and actions

17. What is the main purpose of regression analysis?


a. Predicting future relationships between variables
b. Tracking user activities in a system
c. Analyzing historical weather patterns
d. Designing marketing campaigns
Answer: a) Predicting future relationships between variables

18. What can audit analytics help auditors identify within financial information?
a. Market trends
b. Potential risks, fraud, or errors
c. Employee salaries
d. Customer satisfaction levels

Answer: b) Potential risks, fraud, or errors


19. What does an audit trail provide a chronological record of within a system?

a. Only financial transactions


b. Only positive outcomes
c. All events and actions
d. Only software installations
Answer: c) All events and actions

20. A key challenge of implementing CA/CM is:


(a) Lack of skilled personnel with expertise in data analysis and CAATs.
(b) High initial investment in necessary technology and infrastructure.
(c) Resistance from employees due to concerns about increased surveillance.
(d) All of the above.
(e) None of the above.

Answer: (d) All of the above.

Members: Alvarez, Kristine M.


Clor, Reinami Gracel I.
Malinao, Kianna Angel D.
Rosales, Lady Crystal P.

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