Auditors Need to Be Imaginative to Identify All Possible Paths

question 25

Multiple Choice

Auditors need to be imaginative to identify all possible paths through the AIS.Which of the following sets of test data do they use?

• A)Historical test data from systems development.
• B)Realistic transactions to test all computational paths generated by the auditors.
• C)Realistic transactions based on good accounting practice that test the interface between the work procedures and the AIS.
• D)All of the options are correct.

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Definitions:

Reconstruction Finance Corporation

A government agency established in 1932 in the United States to provide financial support to banks, industries, and other institutions to stimulate economic recovery.

Struggling Banks

Financial institutions experiencing significant challenges such as liquidity issues, insolvency, or failure to meet regulatory requirements.

Congress 1932

Refers to the 72nd United States Congress, notable for its enactment of significant legislation during the Great Depression under President Franklin D. Roosevelt's New Deal.

Nationalizing Industries

The transfer of private sector enterprises to the ownership and operation of the government with the goal of taking control over critical industries or resources.