19. Auditors would most likely introduce test data into a computerized payroll system to test internal controls related to the: (a) Early cashing of payroll checks by employees. (b) Discovery of invalid employee identification numb (c) Existence of unclaimed payroll checks held by supervisors. (d) Proper approval of overtime by supervisors. After obtaining a preliminary understanding of a client's computer controls, auditors may decide not to perform tests of controls. Which of the following would not be a valid reason for choosing to omit test of controls? (a) The client's controls appear to function at an adequate level to justify 20. (b) (c) (d) a low assessment of control risk. The client's computer controls duplicate manual controls existing elsewhere in the system. There appear to be major weaknesses that indicate a high level of control risk. The time and dollar costs of testing computer controls exceed the time and dollar savings in substantive procedures. 21. An auditor is most likely to use statistical sampling under which of the following situations? (a) The auditor has a very good knowledge of the population. (b) The population is very diverse with some segments especially prone (c) (d) to misstatement. Random numbers can be associated with population items. Strictly defensible results based on mathematics are not necessary. What is the primary drawback with respect to the use of sampling? (a) 22. Individuals may fail to obtain a true understanding of the question they are examining The conclusion reached by examining a sample of items may differ from the conclusion that would be reached if the entire population were examined. The time spent in planning and selecting the sample may exceed the time savings from examining only a subset of the items. Sampling cannot be used to examine account balances that are material to the financial statements. (b) (c) (d)