CA Final Audit – Chapter 4 – Special Aspects of Auditing in an Automated Environment MCQs

An __________ is an ecosystem that combines people, processes and technology within an overall business environment.

__________used by micro and small business.

_______ used in small to medium business

______ used in medium to large companies

Tally is an example of which software?

SAP Business One is an example of which software

Oracle Enterprise Business Suite is an example for __________

What are the various layers of an automated environment

A ____________ is a type of automated environment in which business operations and transactions are initiated, processed and recorded immediately as they happen without delay.

What are the componenets of Real Time Environment

Understanding of the automated environment of a company is required as per which standard?

The auditor is required to document the understanding of a company’s automated environment as per which standard?

In a controls-based audit in an automated environment, the audit approach can be classified into how many broad phases.

During which stage the auditor should consider risk arising from the use of IT systems at the company

During which phase the results of general IT controls would impact the nature, timing and extent of testing

______ is the possibility that something could go wrong.

_____________is a combination of process, people, tools and techniques through which companies identify, assess, respond, mitigate and monitor risks.

_____________ is a formal program or framework that is implemented across an enterprise or company for enabling risk management.

Enterprise Risk Management program of a company is implemented by the __________ across all levels

The risk assessment process involves

Which auditing standards require an auditor to understand, assess and respond to the risks within a company.

Has management established an IT Security Policy (Control Environment), communicated the policy to all employees and provided relevant training (Information & Communication)? This relates to

Are unauthorised changes to IT systems applications prevented and detected in a timely manner? This is an example relating to

Are direct data changes to database prevented, are strong passwords used in the operating system? This is an example relating to

The controls to mitigate the IT risks and to maintain the confidentiality, integrity, availability and security of data are

___________ are policies and procedures that relate to many applications and support the effective functioning of application controls.

General IT Controls apply to

Which control maintain the integrity of information and security of data.

General IT controls are known as which controls

Application controls include

Application controls include both automated or manual controls that operate at a ____________.

IT dependent controls are

The controls that operate across a company at all levels from board and top management to the department and transaction level are known as which controls

Entity Level controls are known as __________ since they operate across all organisation levels.

ELCs are part of a company’s overall internal control framework and relate to the internal control components other than ________

Entity level controls are _______ by nature.

Statement 1: Direct ELCs operate at a level higher than business activity or transaction level such as a business process or sub-process level
Statement 2: Direct ELCs operate at a level higher than business process or sub-process level such as a business activity or transaction level

Monitoring of effectiveness of controls activities by Internal Audit function is an example for which of the following

Employee job roles & responsibilities is an example for

Which standard require the auditor to understand the business process that makes up an account balance or financial statement line item (FSLI).

Domestic Sales account balance in the financial statements is an example of an __________.

Generating and preparing meaningful information from raw system data using processes, tools, and techniques is known as _________

The data analytics methods used in an audit are known as ___________

Which of the following is a General IT control?

Which of the following is an automated control?

Who is mainly responsible for implementation of internal financial controls in a company?

The GuidanceNote onAudit ofInternalFinancialControlsoverFinancialReporting has been issued by

Which standard requires auditors to analyse journal entries in an audit?

KPL Private Limited is a large software company based out of Hyderabad. The annual turnover of the company is INR 2,100 crores.During the financial year ended 31 March 2023, the auditors during the course of their audit obtained various audit evidences some of which were in hard copy but mostly in soft copy. On conclusion of the audit, the auditors are in a dilemma whether to maintain their documentation entirely in hard copy or soft copy or can it be mixed of both. After consultations with various persons, the auditors stood that the documentation for this company, being operated in fully automated environment should be in soft copy only.
Please advise whether this understanding is correct.

Risks includes