An Organization Has Developed a Large Database That Tracks Employees

question 132

Multiple Choice

An organization has developed a large database that tracks employees, employee benefits, payroll deductions, job classifications, and other similar information. In order to test whether data currently within the automated system are correct, an auditor should:

• A) Use test data and determine whether all the data entered are captured correctly in the updated database.
• B) Select a sample of data to be entered for a few days and trace the data to the updated database to determine the correctness of the updates.
• C) Use generalized audit software to provide a printout of all employees with invalid job descriptions. Investigate the causes of the problems.
• D) Use generalized audit software to select a sample of employees from the database. Verify the data fields.

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Definitions:

Treasury Bills

Treasury Bills (T-Bills) are short-term U.S. government debt obligations with a maturity of one year or less, considered a safe investment due to government backing.

Financial Instruments

Contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Federal Government

A system of government where powers and responsibilities are divided between a national government and smaller administrative divisions.

TIPS

Treasury Inflation-Protected Securities (TIPS) are a form of U.S. Treasury securities designed to help investors protect against inflation, as their principal value adjusts with the inflation rate.