Application Controls Vary with Each Application in the IT System

question 45

Multiple Choice

Application controls vary with each application in the IT system.In attempting to review and gain an understanding of the internal control system, the auditor must evaluate the application controls for every:

• A) audit area in which the client uses the computer.
• B) material audit area.
• C) audit area.
• D) audit area where the auditor plans to reduce assessed control risk.

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Definitions:

Operating Activities

Part of a company's cash flow statement that shows the cash generated or used by its core business operations.

Equity Method

An accounting technique used to reflect the investment in another company, typically applied when an investing entity holds significant influence over the investee.

Investee Earnings

The share of income that an investor recognizes from its investment in another entity.

Net Income

Net Income is the total profit or earnings of a company after all expenses, taxes, and costs have been deducted from total revenue.