IT Controls That the Auditor Might Expect to Find in the Long-Term

question 73

Multiple Choice

IT controls that the auditor might expect to find in the long-term and owner's equity process are

• A)Long-term debt is recorded when cash related to debt issues is entered
• B)increases in the common stock account and the additional paid in capital account are supported by decreases in either cash or assets
• C)deferred interest entries must be supported by information about the principle,interest rate,and origination date of the debt
• D)IT system restricts access to individuals authorized to input debt transactions and stock transactions
• E)Treasury stock transactions are reported to the board of directors
• F)both A and B
• G)both A and D
• H)both C and E

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Definitions:

Declining-Balance

A method of depreciation where an asset loses value at a rate that decreases over time, opposite of straight-line depreciation.

Useful Life

The estimated duration of time an asset is expected to be useful and productive for the purpose it was acquired.

Replace The Asset

The process of substituting an existing asset with a new or improved version, often due to obsolescence, wear, or technological advances.

Obsolescence Factors

Elements that contribute to the decline in value and usefulness of assets over time, affecting their depreciation.