The Existence of Advanced Automated Systems Affects the Audit Process

question 32

Multiple Choice

The existence of advanced automated systems affects the audit process.Which of the following characteristics is an indicator of the presence of an advanced automated information system?

• A)use of data communications (such as the Internet)to transfer transaction data
• B)use of packaged software to process sales both locally and across Canada
• C)use of customer relationship management systems to manage sales information
• D)numerically-controlled equipment used in the manufacturing process

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Definitions:

Compounded Monthly

A method of calculating interest where the interest earned on an investment is reinvested and earns additional interest in subsequent periods on a monthly basis.

Monthly Payments

Regular payments made over a set period of time, such as those for loans or subscriptions, calculated on a monthly basis.

Loan

An amount of money lent that must be repaid along with interest.

Compounded Daily

Interest calculation method where the interest is calculated and added to the principal amount daily, leading to increased earnings or payments over time.