The Auditor's Objective in Determining Whether the Client's Computer Program

question 46

Multiple Choice

The auditor's objective in determining whether the client's computer program correctly processes valid and invalid transactions is accomplished through the

• A) test data approach.
• B) generalized audit software approach.
• C) microcomputer-aided auditing approach.
• D) generally accepted auditing standards.

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Definitions:

Straight Line

A method of calculating depreciation or amortization by spreading the cost evenly over the useful life of an asset.

MACRS

Modified Accelerated Cost Recovery System; a method of depreciation for tax purposes in the United States.

Depreciated

A decrease in the value of an asset over time due to wear and tear, obsolescence, or market conditions, often used for tax purposes.

Cash Inflow

The total amount of money being transferred into a business, from operations, financing or investing activities, over a specific period of time.