When the Client Uses a Computer but the Auditor Chooses

question 61

Multiple Choice

When the client uses a computer but the auditor chooses to use only the non-IT segment of internal control to assess control risk, it is referred to as auditing around the computer.Which one of the following conditions need not be present to audit around the computer?

• A)Application controls need to be integrated with general controls.
• B)The source documents must be available in a non-machine language.
• C)The documents must be filed in a manner that makes it possible to locate them.
• D)The output must be listed in sufficient detail to enable the auditor to trace individual transactions.

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Definitions:

Operating Cash Flow

Operating cash flow represents the cash generated by a company's regular business operations, reflecting its ability to generate sufficient positive cash flow to maintain and grow its operations.

Employee Salaries

Compensation paid to employees for their labor, typically in the form of a wage, salary, or commission.

Pro Forma Statements

Financial statements prepared using hypothetical scenarios or assumptions to project future financial performance.