Which of the Following Statements Best Describes the Impact on an Audit

question 17

Multiple Choice

Which of the following statements best describes the impact on an audit when a client uses computerized processing of transactions?

• A)The objective of the audit examination focuses on detection of fraud and theft through the computer.
• B)The type of substantive procedures performed by the audit team change because of the use of computerized processing.
• C)The effectiveness of computer controls implemented by the client over its computerized processing may need to be evaluated by audit teams.
• D)Different independence standards are introduced for audit teams when clients utilize computerized processing.

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Definitions:

Peak Selling Period

The time frame during which sales for a particular product or service reach their highest levels, often related to seasonal demand or specific marketing campaigns.

Credit Risk

The possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations.

Accounting Standards

Are the rules and guidelines that companies must follow when reporting financial data, allowing for consistency, transparency, and comparability.

Financial Statement Forecasts

Projections or estimates of a company's future financial performance, including income statements, balance sheets, and cash flows.