When Using Test Data,why Are Audit Teams Required to Prepare

question 19

Multiple Choice

When using test data,why are audit teams required to prepare only one transaction to test each computer processing alternative?

• A) The speed and efficiency of the computer results in reduced sample sizes.
• B) The risk of misstatement is typically lower in a computerized processing environment.
• C) Audit teams generally perform more extensive substantive testing in a computerized processing environment, resulting in less need to test processing controls.
• D) In a computerized processing environment, each transaction is handled in an identical manner.

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Definitions:

Objective

A specific result that a person or system aims to achieve within a timeframe with clear, measurable actions.

Problem Solving Software

Specialized software designed to assist in analyzing, understanding, and finding solutions to complex problems or equations.

Constraint

A condition or limitation that must be satisfied in optimization problems or in systems design.

Shadow Price

The implied worth or value of an intangible or constrained resource, used in economic or optimization models to assess opportunity costs.