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:

Bankruptcy Proceedings

The legal process through which individuals or entities unable to meet their financial obligations can seek relief from some or all of their debts.

Fair Market Value

The price that property would sell for on the open market, between a willing buyer and a willing seller.

Forced into Bankruptcy

A situation where an individual or company is legally compelled into declaring bankruptcy by creditors or legal action, often due to inability to pay outstanding debts.

Unsecured Claims

Claims or debts in a bankruptcy that are not backed by any collateral and therefore rank lower in priority for repayment.