The Auditor's Objective in Determining Whether the Client's Automated Controls

question 9

Multiple Choice

The auditor's objective in determining whether the client's automated controls can correctly handle valid and invalid transactions as they arise 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:

Material Requisition

A document used to order material or supplies from the storeroom that provides the basis for charging material into production.

Raw Materials

The basic materials from which products are manufactured or made, typically used in the early stages of the production process.

On Account

Refers to purchases made or services rendered on a credit basis, implying that payment will be made at a future date.

Raw Materials Inventory

Stocks of basic materials that are used in the production process before undergoing manufacturing.