Which of the Following Strategies Will a CPA Most Likely

question 32

Multiple Choice

Which of the following strategies will a CPA most likely consider in auditing an entity that processes most of its financial data only in electronic form,such as a paperless system?

• A)Continuous monitoring and analysis of transaction processing with an embedded audit module.
• B)Increased reliance on internal control activities that emphasize the segregation of duties.
• C)Verification of encrypted digital certificates used to monitor the authorization of transactions.
• D)Extensive testing of firewall boundaries that restrict the recording of outside network traffic.

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Definitions:

Contract Rate

The predetermined price per unit of service or good agreed upon in a contractual agreement.

Market Rate

The prevailing rate of interest or value for currencies or goods in the marketplace, often influenced by supply and demand.

Effective Interest Rate Method

A technique used in finance to find the actual interest rate per period with compounding taken into account.

Amortizing

The process of gradually paying off a debt over a period of time through regular payments.