After Obtaining an Understanding of a Client's IT Control, an Auditor

question 76

Multiple Choice

After obtaining an understanding of a client's IT control, an auditor may decide not to perform tests of controls within the IT portion of the client's system. Which of the following would not be a valid reason for choosing to omit tests of controls?

• A) There appear to be major deficiencies that preclude reliance on the stated procedure.
• B) The time and dollar costs of testing controls exceed the savings in substantive testing if the tests show the controls to be operative.
• C) The controls appear to be adequate and thus can be relied upon in assessing the level of control risk.
• D) The controls duplicate controls existing elsewhere in the system.

Comprehend the drivers behind the increasing focus on sustainability in business practices.

Grasp how prices of emissions are determined under different regulatory systems.

Understand the principles and benefits of differential pricing in revenue management.

Recognize the effects of differential pricing on product availability and retailer profits.

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Definitions:

Sample Proportion

The fraction of observations in a sample that belong to a certain category, serving as an estimate of the proportion in the population.

Bias

A systematic error or deviation from the truth in results or inferences.

Normal Distribution

A bell-shaped curve distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Simple Random Sample

A portion of a broader statistical population where each member has an equal likelihood of selection.