Application Controls Vary with Each Application in the IT System

question 85

Multiple Choice

Application controls vary with each application in the IT system. In attempting to review and gain an understanding of the internal control system, the auditor must evaluate the application controls for:

• A) every audit area.
• B) every material audit area.
• C) every audit area in which the client uses the computer.
• D) every audit area where the auditor plans to reduce assessed control risk.

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Definitions:

Fixed Costs

Fixed expenses unaffected by variations in production volume or sales figures, like rental fees, salary payments, and insurance costs.

Graphical Approach

A method of solving problems or representing data using diagrams, charts, or graphs.

CVP Analysis

Cost-Volume-Profit Analysis, a management accounting methodology used for understanding the relationship between costs, volumes of sales, and profit.

Variable Cost

Costs that vary in proportion to the level of activity or volume of production in a business.