Internal Control

Chapter 08

Consideration of Internal Control in an Information Technology Environment

True / False Questions

1. Magnetic tape drives have the advantage of direct access to stored data. 

True    False

2. The operating system is an example of system software. 

True    False

3. For good internal control, programmers should not be given access to complete program documentation for the programs they work on. 

True    False

4. Data encryption is an example of data transmission control. 

True    False

5. Internal file labels are designed to prevent errors by programmers. 

True    False

6. For auxiliary storage when the computer is operating, personal computers use hard disk drives. 

True    False

7. Distributive data processing eliminates the need for data security. 

True    False

8. Most advanced computer systems do not have audit trails. 

True    False

9. Auditors usually begin their consideration of IT systems with tests of application controls. 

True    False

10. Generalized audit software may be used for substantive tests or for tests of controls. 

True    False

Multiple Choice Questions

11. Which of the following procedures would an entity most likely include in its disaster recovery plan? 

A. Convert all data from external formats to an internal company format.

B. Maintain a program to prevent illegal activity.

C. Develop an auxiliary power supply to provide uninterrupted electricity.

D. Store duplicate copies of files in a location away from the computer center.

12. A service auditor's report on a service center should include a(n) 

A. Detailed description of the service center's internal control.

B. Statement that the user of the report may assess control risk at the minimum level.

C. Indication that no assurance is provided.

D. Opinion on the operating effectiveness of the service center's internal control.

13. The report of a...