The IT Auditing Approach Referred to as "Auditing Through the System

question 45

Multiple Choice

The IT auditing approach referred to as "auditing through the system" is necessary under which of the following conditions?

• A)Supporting documents are available in both electronic and paper form.
• B)The auditor does not require evaluation of computer controls.
• C)The auditor wants to test computer controls as a basis for evaluating risk and reducing the amount of substantive audit testing required.
• D)The use of the IT system has a low impact on the conduct of the audit.

---

Definitions:

Direct Materials

Raw materials directly used in the manufacturing process of a product, easily traceable and integral to the finished good.

Direct Labor

The wages and other costs for labor that is directly involved in the manufacturing or production of goods or services.

Operating Income

A measure of a company's profit excluding one-off items and costs not directly related to its core operations, such as interest and taxes.

Net Cash Inflows

The total amount of cash received minus cash outflows over a specific period, indicative of financial health.