When There Are Problems with Program Change Procedures or with Access

question 88

Multiple Choice

When there are problems with program change procedures or with access controls, the auditor may choose to

• A) rely less on manual controls since control risk has been increased.
• B) not rely on programmed or interdependent application controls.
• C) reduce control risk, which reduces the level of substantive testing.
• D) use an information technology audit specialist to assess programmed application controls.

---

Definitions:

Optimal Order Size

The quantity that minimizes the total cost of inventory, including holding and ordering costs.

Annual Inventory Cost

The total cost associated with storing and maintaining a company's inventory over one year, including warehousing and insurance.

Maximum Inventory Level

The highest amount of inventory a business can hold to efficiently meet customer demand while minimizing holding costs.

Setup Cost

The expenses incurred to prepare and equip a process, production line, or machine to manufacture a new product batch or order.