QUESTION 21

1. Substantive tests include

   	a.	completing questionnaires
   	b.	reviewing customer invoice amounts to verify the balance in the sales revenue account.
   	c.	reviewing systems documentation
   	d.	observation

3 points

QUESTION 22

1. Tests of controls include

   	a.	completing questionnaires
   	b.	confirming accounts receivable
   	c.	counting cash
   	d.	counting inventory

3 points

QUESTION 23

1. All of the following are components of audit risk except

   	a.	legal risk
   	b.	inherent risk
   	c.	control risk
   	d.	detection risk

3 points

QUESTION 24

1. Control risk is

   	a.	the probability that the auditor will render an unqualified opinion on financial statements that are materially misstated
   	b.	associated with the unique characteristics of the business or industry of the client
   	c.	the risk that errors not detected or prevented by the control structure will also not be detected by the auditor
   	d.	the likelihood that the control structure is flawed because controls are either absent or inadequate to prevent or detect errors in the accounts

3 points

QUESTION 25

1. Inherent risk

   	a.	exists because all control structures are flawed in some ways.
   	b.	is the likelihood that material misstatements exist in the financial statements of the firm.
   	c.	is the likelihood that the auditor will not find material misstatements.
   	d.	is associated with the unique characteristics of the business or industry of the client.

3 points

QUESTION 26

1. Which of the following is not a generally accepted auditing standard?

   	a.	The auditor must obtain sufficient, competent evidence.
   	b.	All of the above are generally accepted auditing standard general standards.
   	c.	The auditor must have independence of mental attitude.
   	d.	The auditor must have adequate technical training and proficiency.

3 points

QUESTION 27

1. 1. The NYC Consultants Inc.,one of the largest service company in the country, have recently completed the installation of an ERP system named EZ Online. The primary purpose of an ERP system is to:

   	a.	Allow management to rely on technology to make effective business decisions.
   	b.	Reduce the cost of an audit by implementing internal controls provided by the ERP.
   	c.	Integrate an organization's business processes with the benefits of a shared database.
   	d.	Decrease an organization's expenses by reducing the number of employees through automation.

3 points

QUESTION 28

1. Which of the following is not a requirement in managements report on the effectiveness of internal controls over financial reporting?

   	a.	A statement of managements responsibility for establishing and maintaining adequate internal control user satisfaction.
   	b.	An explicit written conclusion as to the effectiveness of internal control over financial reporting.
   	c.	A statement that the organizations internal auditors has issued an attestation report on managements assessment of the companys internal controls.
   	d.	A statement identifying the framework used by management to conduct their assessment of internal controls.

3 points

QUESTION 29

1. Which statements about data warehousing is not correct?

   	a.	Data cleansing is a process of transforming data into standard form.
   	b.	The data warehouse should be separate from the operational system.
   	c.	Normalization is a requirement of databases included in a data warehouse.
   	d.	Drill-down is a data-mining tool available to users of OLAP.

3 points

QUESTION 30

1. Which of the following is usually not part of an ERPs OLAP applications?

   	a.	logistics
   	b.	what-if analysis
   	c.	ad hoc analysis
   	d.	decision support systems