Page 116 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
30
"Zenith Software Ltd has appointed Ram Laxman & Associates as its auditors for financial year 2019-
2020. The audit would cover all the usual aspects of financial auditing but would be more focused on
Systems Audit as Zenith Software is a company which maintains its financial records extensively on
digital platform. The processes, operations, accounting and decisions are carried out by using computers
in Zenith Software Ltd.

Standards on Auditing SA 315 and SA 330 require auditors to understand, assess and respond to risks
that arise from the use of IT systems. Ram Laxman & Associates have been seasoned auditors but have
not carried out Systems audit in detail.
The tools and techniques that can be used to deal with the enormous data and information of Zenith
Software Ltd. were briefed to the audit staff by the engagement partners, but they still have some
queries and doubts and seek your assistance for conducting this special assignment.

Based on below queries/cases, you are required to answer on specific areas which require special
attention while conducting audit in an automated environment."
I. " __________________ are policies and procedures that relate to many applications and support
the effective functioning of application controls

(a). General IT Controls
(b). IT Dependent Manual Controls
(c). Both a) and b)
(d). None of these"
II. "The objective of which of the following is to ensure that access to programs and data is
authenticated and authorized to meet financial reporting objectives

(a). Data Centre and Network Operations
(b). Program Change
(c). Access Security
(d). Application system, acquisition, development and maintenance"

III. "Tools and techniques that auditors use in applying the principles of data analytics are known as-
(a). Computer Aided Audit Technique
(b). Computer Aided Audit Tools
(c). Computer Accounting and Auditing Technique
(d). Computer Assisted Audit Technique"
IV. "____________ is a term that is used to describe a very large computer with high computing
power, memory and storage that are required for running large business operations. #Unique
(a). Application
(b). Read Access Memory
(c). Automated
(d). (d) Mainframe"
V. "__________ are needed to support the functioning of ____________ and both are needed to
ensure complete and accurate information processing through IT systems.
(a). Internal controls, Automated controls
(b). IT- Dependent controls, General IT controls
(c). Application controls, IT- Dependent controls
(d). General IT controls, Application controls"

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"ARG & Associates who have been the auditors of Sigma Ltd for the financial year 2019-20 have
concluded their audit, prepared their notes and are ready to draft the Auditor’s Report. As per SA 700,
the auditor shall form an opinion on whether the financial statements are prepared, in all material
respects, in accordance with the applicable financial reporting framework.

There seems to be some confusion between the audit team members in regard to format of Audit
report, its contents, issues to be incorporated etc. in the Auditor’s report.

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