CIA Exam Review Course

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CIA Exam Review Course Part II
March 11, 2003
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Media in Audit

• 14. For which of the following computer-assisted
  auditing techniques (CAATs) does the internal
  auditor use a controlled program?
• Integrated test facility.
• Parallel simulation.
• C. Test data approach.
• D. Program code checking

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• 15. Which of the following statements concerning
  the parallel simulation approach for testing a
  computerized accounting system is false?
• A. Transactions are re-processed by managements
  computer programs.
• B. Transactions from throughout the period be
  reprocessed.
• C. Only actual, not fictitious, transactions
  reprocessed.
• D. It tends to be a very costly method.

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• 16. Parallel simulation is an appropriate
  engagement procedure for
• A. Testing for the presence of authorized
  signatures on documents.
• B. Summarizing the results of accounts receivable
  confirmation work.
• C. Calculating amounts for declining-balance
  depreciation charges.
• D. Scanning the general ledger file for unusual
  transactions.

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• 17. Which of the following statements is false
  about the integrated test facility (ITF) method
  for testing e computerized accounting system?
• A. ITF reprocesses only actual, not fictitious,
  transactions.
• B. The test transactions may be submitted
  without the computer operator's knowledge
• C. ITF tests the actual program in operation.
• D. The ITF method is also known as the
  minicompany technique.

• 18. Which of the following computer-assisted
  auditing techniques (CAATs) allows fictitious and
  actual transactions to be processed together
  without the knowledge of operating personnel?
• A. Integrated test facility (ITF).
• B. Input controls matrix.
• C. Parallel simulation.
• D. Data entry monitor.

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• The following flowchart depicts

Transaction File
Managements Program
Auditors Program
Master File
Compare
Output
Output

• Program code checking
• Parallel simulation

• Integrated Test Facility
• Controlled Processing

Exception Report
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C. Types of Software Technology Used

• Internal auditors ordinarily use two major types
  of software
• Productivity Packages
• e.g. Wordprocessors, Spreadsheets etc.
• Computer-Assisted Audit Techniques
  (CAATs) software
• a. CAATs may be used during every phase of the
  audit process, from planning to reporting.
• b. CAATs may be systems-based or
  transaction-based software, or software that
  provides automated techniques for extracting and
  analyzing data.

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C. Types of Software Technology Used contd

• c. Common types of CAATs
• Generalized audit software
• - performs automated functions.
• Utility software
• - performs routine processing tasks.
• Applications software tracing and mapping
• - can follow an audit trail of information.
• Expert systems software
• - automates the knowledge logic of experts.

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C. Types of Software Technology Used contd
d. Examples of leading CAAT Packages -
Audit Command Language (ACL)
- Interactive Data
Extraction and Analysis (IDEA) Major functions
performed by CAATs a. Aging b. Duplicate
identification c. Exportation d.
Extraction e. Gap identification  f. Joining
and merging g. Sampling h. Sorting
i. Stratification j. Summarization k.
Total fields
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Review Questions

• A primary advantage of using Generalized Audit
  Software (GAS) packages is that the auditor may
• Substantiate the accuracy of data thru
  self-checking digits hash totals.
• Reduce the level of required tests of controls to
  a relatively small amount.
• Access info stored on computer files without a
  complete understanding of the companys H/W S/W
  features.
• Consider increasing use of substantive tests of
  transactions in place of analytical procedures.
  

• CIA

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End of Study Unit-6
End of Presentation