In Parallel Simulation, Actual Client Data Are Reprocessed Using an Auditor

question 627

Multiple Choice

In parallel simulation, actual client data are reprocessed using an auditor software program. An advantage of using parallel simulation, instead of performing tests of controls without a computer, is that:

• A) The test includes all types of transaction errors and exceptions that may be encountered.
• B) The client's computer personnel do not know when the data are being tested.
• C) There is no risk of creating potentially material errors in the client's data.
• D) The size of the sample can be greatly expanded at relatively little additional cost.

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Definitions:

Year 2

The second year in a series or sequence, commonly used in discussions of financials and planning.

Total Asset Turnover

A financial ratio that measures a company's ability to generate sales from its assets by comparing net sales with average total assets.

Year 2

Typically refers to the second year of a particular time frame, such as a business plan, financial projections, or an academic calendar.

Total Asset Turnover

A financial ratio that measures a company's ability to generate sales from its assets, indicating operational efficiency.