When Audit Teams Test a Computerized Processing System,which of the Following

question 21

Multiple Choice

When audit teams test a computerized processing system,which of the following is true of the test data approach?

• A)Several transactions of each type must be tested.
• B)Test data are processed by the client's computer programs under the audit team's control.
• C)Test data must consist of all possible valid and invalid combinations.
• D)The computer program used to process test data is different from the program used throughout the year by the client.

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Definitions:

Paper Company

A business entity created, often in a tax haven, for the purpose of managing investment or conducting transactions without engaging in operational business activities.

Interest Calculation

The process of determining the amount of interest earned or paid on a financial instrument or account, based on the principal, the rate, and the time.

Fair Value

The price that would be received for an asset if it were sold today.

Face Value

The face value or monetary amount shown on a financial document, like a bond or share certificate.