Which of the Following Is True of Generalised Audit Software

question 25

Multiple Choice

Which of the following is true of generalised audit software?

• A) They can be used on any computer without modification.
• B) They can only be used in auditing on-line computer systems.
• C) They enable the auditor to perform manual procedures related to tests of controls less expensively.
• D) They each have their own characteristics which the auditor must carefully consider before using in a given audit situation.

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Definitions:

Operating Assets

Assets utilized in the day-to-day operations of a business to generate revenue, including machinery, buildings, and equipment.

Residual Income

The income that remains after subtracting all required costs of capital from operating income, a measure of profitability.

Minimum Required Rate

The lowest rate of return that an investment must yield to be considered acceptable, often tied to the cost of capital or inflation.

Investment Opportunity

A financial investment or asset that has the potential to yield returns or profits.