An Auditor Can Use Computer Audit Software to Do All

question 22

Multiple Choice

An auditor can use computer audit software to do all of the following except:

• A) select a sample of accounts receivable for confirmation.
• B) reperform a variety of calculations such as totaling the accounts receivable subsidiary ledger or inventory file.
• C) perform the calculations and comparisons used in tracing procedures.
• D) submit test data to the client's programs to determine that computer aspects of internal controls are functioning.
• E) scan a file to determine that all documents in a series have been accounted for.

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Definitions:

Present Value

Present value is the current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Regular IRR

The Internal Rate of Return (IRR) is a financial metric used to estimate the profitability of potential investments.

WACC

The Weighted Average Cost of Capital represents the average cost of a company's financing (debt and equity), where each form of capital is weighted according to its proportion in the overall financing mix.

NPV

Net Present Value; a method used in capital budgeting to assess the profitability of an investment or project, calculated by discounting future cash flows to their present value and subtracting the initial investment.