Theo Lillis Performs the Following Application Control Procedures: (I) Control

question 45

Multiple Choice

Theo Lillis performs the following application control procedures: (i) Control totals: Input totals are balanced and reconciled
(ii) Reasonable checks: Actual data is compared to expected data for reasonableness
(iii) Sequence tests: Sequential data is reviewed and exception reports are produced for missing numbers.
Which of the above application controls do these procedures apply to?

• A) processing controls
• B) output controls
• C) input controls
• D) general controls

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Definitions:

Risk-neutral

A condition or attitude where an individual or entity is indifferent to risk when making investment decisions, caring only about the expected outcome without concern for the variability of returns.

Risk-loving

Refers to individuals or entities that prefer or are willing to take more risks, often for the possibility of higher returns.

Marginal Utility

The additional satisfaction or benefit received from consuming one more unit of a product or service.

Asymmetric Information

One of the parties to a transaction has information relevant to the transaction that the other party does not have.