When the Client Uses a Computer but the Auditor Chooses

question 80

Multiple Choice

When the client uses a computer but the auditor chooses to use only the non-IT segment of internal control to assess control risk, it is referred to as 'auditing around the computer'.Which one of the following conditions need NOT be present in order to audit around the computer?

• A) The source documents are available in a readable form and can be traced easily through the accounting system to output.
• B) User controls include comparison of computer-produced records with source documents.
• C) Computer programs must be available in English.
• D) The accounting software can display or print ledger balances and transaction details that allow the auditor to trace individual transactions through the accounting records.

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Definitions:

Subchapter S

A designation for corporations that meet specific Internal Revenue Code requirements, allowing them to pass income directly to shareholders and avoid double taxation.

Model Business Corporation Act

A model set of laws prepared by the Committee on Corporate Laws of the American Bar Association to standardize and provide a guideline for corporation law.

Small Corporations

Businesses incorporated under the laws of a state that have a limited number of shareholders and meet certain other criteria.

Benefit Corporation

A type of for-profit corporate entity that includes positive impact on society, workers, the community, and the environment in addition to profit as its legally defined goals.