Which of the Following Is Not True with Respect to the Test

question 16

Multiple Choice

Which of the following is not true with respect to the test data approach for evaluating computer controls?

• A)The test data are created for a separate entity and are run simultaneously with the client's actual data.
• B)Only one of each type of error transaction needs to be included in the test data.
• C)The manual results of processing the test data are compared to the results of processing these data through the client's computerized processing system.
• D)Audit teams consider potential errors and conditions of interest in generating the test data.

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Definitions:

Annuity Payments

Regular payments made from an investment that was designed to provide an income over a period of time.

RRSP

Registered Retirement Savings Plan, a Canadian government-approved program to help residents save for retirement.

Compounded Annually

The method by which interest is calculated once per year on both the initial principal and the accumulated interest from previous periods.

Compounded Monthly

Compounded monthly refers to the process of accruing interest on an investment or loan where the interest earned is added to the principal amount at the end of each month, allowing the interest to itself earn interest in subsequent months.