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Audit and Accounting Exam Questions

Model question 1

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8 views12 pages

Audit and Accounting Exam Questions

Model question 1

Uploaded by

Rishav Subedi
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Aug 17- CAAT_formatted

Number: 000-000
Passing Score: 600
Time Limit: 60 min
File Version: 1.0
Exam A

QUESTION 1
CCTV installed in the server room is part of ......................

A. General Control
B. Application Control
C. None of the above

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 2
Check digits fall under the category of ....................

A. Field level test


B. Record level test
C. Group of records test
D. None of the above

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 3
White box test falls under the category of ...............

A. Static analysis
B. Dynamic analysis
C. Big bang test
D. Incremental test

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 4
As audit productivity tools group ware is used for ..............

A. Audit planning and tracking


B. Communication
C. Resource management
D. Data management

Correct Answer: D
Section: (none)
Explanation

Explanation/Reference:

QUESTION 5
Under .............. the auditors " think like a crook"

A. Cyber audit
B. Audit by simulation of errors and frauds
C. Software development audit
D. Information assets security and auditing

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 6
Logical comparisons fall under ..............

A. Identifying items of audit interest


B. Audit mathematics
C. Data analysis
D. System validation

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 7
Taking live transaction data and reprocessing through a program that is not live is called ..............

A. Source code review


B. Parallel programming
C. Parallel processing
D. Transaction tagging

Correct Answer: C
Section: (none)
Explanation

Explanation/Reference:

QUESTION 8
Continuous monitoring of transaction data to extract anomalies in real time is possible through ..............

A. Audit hooks
B. Transaction tagging
C. Audit trail control
D. Log file review

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 9
.............................is used to follow a selected transaction through the entire application from input till output.

A. Audit hooks
B. Transaction tagging
C. Test data generation
D. Continuous monitoring

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 10
In IDEA sampling can be done using ..............

A. Random technique
B. Systematic technique
C. Stratified technique
D. All of the above

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 11
In system development life cycle "RAD" is used while.................

A. Requirement definition
B. System design
C. Development
D. None of the above

Correct Answer: C
Section: (none)
Explanation

Explanation/Reference:
QUESTION 12
In Benford's law the occurrence of zero is predicted as...........

A. Most occurring
B. Least occurring
C. Not predicted
D. Don't Know

Correct Answer: C
Section: (none)
Explanation

Explanation/Reference:

QUESTION 13
In MS Excel sampling command is kept under..............

A. Conditional formatting
B. Data analysis
C. Formulas
D. All of the above

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 14
Auditor's independence is compromised while working as ..............

A. Control consultant
B. Independent reviewer
C. None of the above

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 15
Auditor's principal objective in software development audit is ..............

A. To ensure that investment will produce value for money


B. To ensure that the system development meets internal control requirements
C. Both of the above

Correct Answer: C
Section: (none)
Explanation
Explanation/Reference:

QUESTION 16
In system development, while determining the level of auditor's involvement, lack of development standards fall
under ..............

A. Process risk
B. Application risk
C. General risk
D. Development risk

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 17
In system development process, user acceptance testing falls under.................

A. Requirement definition phase


B. System design phase
C. Development phase
D. Implementation phase

Correct Answer: C
Section: (none)
Explanation

Explanation/Reference:

QUESTION 18
A/An ------------- is the official notice that the firm sends to its customers to advise them to the amount of money
that is owed.

A. Invoice
B. Bill
C. A and B
D. None of the above

Correct Answer: D
Section: (none)
Explanation

Explanation/Reference:

QUESTION 19
In the Tally Software, the ------------ directory stores all data entered by the user.

A. Bin
B. Data
C. Sub
D. None of the above

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 20
The value of the inventory is included as an asset on the balance sheet.

A. True
B. False
C. Don't know
D. Shall answer later

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 21
Import and Export of data between Tally and other programs is possible only through ______ Program.

A. Tally ODBC
B. JDBC
C. Tally INI
D. Tally IMP

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 22
The day book contains transactions relating to ____________

A. Income or expenditure
B. Sales or purchase
C. Asset or liability
D. Profit or loss

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:
QUESTION 23
What is the function of the option `Group Behaves Like sub-ledger'?

A. Transactions cannot be passed in the group


B. Sub Groups cannot be created.
C. Displays grouped value during detailed report.
D. Will not be displayed in any report.

Correct Answer: C
Section: (none)
Explanation

Explanation/Reference:

QUESTION 24
_______ are units to which costs / expenses are allocated

A. Cost Centres
B. Profit Centres
C. Cost Categories
D. Stock Category

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 25
The transactions entered in foreign currency are _______ for data analysis.

A. Retained in foreign currency without being converted to base currency


B. Maintained in a separate menu called `Exception Report'
C. To be re-entered in Journal
D. Converted to base currency as per the exchange rate specified

Correct Answer: D
Section: (none)
Explanation

Explanation/Reference:

QUESTION 26
If you enable tally vault, Tally _________ the company data

A. locks
B. splits
C. combines
D. encrypts

Correct Answer: D
Section: (none)
Explanation

Explanation/Reference:

QUESTION 27
In INV-001, 001 is called

A. Prefix
B. Suffix
C. Start Number
D. Start Alphabet

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 28
Which of the following types of transactions usually does require Ajusting Entriy

A. Payroll accrual
B. Unearned revenue
C. Prepaid insurance
D. Bank Transfer

Correct Answer: D
Section: (none)
Explanation

Explanation/Reference:

QUESTION 29
In a subsidiary ledger

A. Summary of Customer/Supplier is kept


B. Details of Customer/Supplier is kept
C. Details of subsidiary company is kept
D. In modern accounting system we no longer use subsidiary ledgers

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 30
____________is used to print the primary books of accounts like the Cash and Bank Books, Account Ledgers,
Sales and Purchase Registers instead of selection the accounts one at a time.

A. Various-Accounts Printing
B. All Accounts Printing
C. Multi-Account Printing
D. Import Accounts Printing

Correct Answer: C
Section: (none)
Explanation

Explanation/Reference:

QUESTION 31
_____________is the facility in accounting packages which allows the privileged user to log in as an
administrator and perform administrative tasks like viewing the audit log.

A. Password Control
B. Encryption
C. Vault Password
D. Authorization signature

Correct Answer: D
Section: (none)
Explanation

Explanation/Reference:

QUESTION 32
At a minimum, we can categorize the accounts into.........................

A. Assets, Liabilities, Equity, Income and Expenses


B. Balance Sheet Accounts and Profit & Loss Accounts
C. Assets, Liabilities, Income and Expenses
D. Trading and Non-Trading

Correct Answer: C
Section: (none)
Explanation

Explanation/Reference:

QUESTION 33
The major divisions of a Chart of Accounts are.........................

A. Assets, Liabilities, Equity, Income, Cost of Goods Sold and Expenses


B. Balance Sheet, Profit and Loss Accounts and Cash Flow
C. Balance Sheet, Profit and Loss Accounts and Trial Balance
D. Debits and Credits

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:
QUESTION 34
The general ledger is.............................

A. where financial information from all closing entries of a business is consolidated


B. where financial information from all opening entries of a business is consolidated
C. where financial information from all adjustment entries of a business is consolidated
D. where financial information from all aspects of a business is consolidated

Correct Answer: D
Section: (none)
Explanation

Explanation/Reference:

QUESTION 35
ODBC stands for...............................

A. Online Database Connectivity


B. Optional Database Connectivity
C. Open Database Connectivity
D. Open Database Connector

Correct Answer: C
Section: (none)
Explanation

Explanation/Reference:

QUESTION 36
If you enable tally vault, Tally _________ the company data

A. locks
B. splits
C. combines
D. encrypts

Correct Answer: D
Section: (none)
Explanation

Explanation/Reference:

QUESTION 37
Tally data can be imported into MS Excel using..................................

A. MS ACCESS
B. ODBC
C. SQL Server
D. Oracle
Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 38
QuickBooks is a/an _____________

A. CRM Software
B. Accounting Software
C. Word Processing Software
D. Online Collaboration Software

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

QUESTION 39
______________are the only default ledgers in Tally.

A. Cash and Profit & Loss Accounts


B. Income and Expense Accounts
C. Opening Balance Equity and Cash Accounts
D. All of the above

Correct Answer: A
Section: (none)
Explanation

Explanation/Reference:

QUESTION 40
Debit always increase the account balance.................

A. TRUE
B. FALSE
C. Don't Know
D. Tell you later

Correct Answer: B
Section: (none)
Explanation

Explanation/Reference:

Common questions

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User acceptance testing during the development phase is vital for ensuring the system meets the user's requirements and functions correctly in the user's environment. It is a critical step that verifies the system’s alignment with business goals and identifies issues before full deployment, thereby enhancing user satisfaction and reducing costly post-launch errors .

Thinking like a crook involves anticipating potential fraudulent activities by understanding the motives and opportunities for deceit. This requires auditors to critically analyze systems for vulnerabilities, apply forensic accounting skills, and creatively assess the propensity for fraud, thereby enhancing the ability to detect deception and improve internal controls .

Random sampling in IDEA provides the merit of impartiality, ensuring every record has an equal chance of selection, which enhances the representativeness of the sample. However, it may be restricted by the potential for not capturing subtle patterns more evident in systematic sampling, thereby influencing the thoroughness of audit conclusions .

Check digits are used in field level tests to validate the accuracy of entered data by ensuring the integrity and correctness of input fields, which is crucial for preventing data entry errors that could lead to significant logistical and financial discrepancies .

RAD (Rapid Application Development) is employed during the development phase to accelerate the creation of highly adaptable and responsive software through iterative prototyping and user feedback. This methodology enhances project success by rapidly adapting to change, reducing time to market, and improving stakeholder satisfaction through continuous involvement and refinement .

Continuous transaction monitoring using audit hooks enhances real-time anomaly detection by embedding triggers within electronic transaction workflows to immediately flag and report atypical patterns. This allows for swift corrective actions, reducing the risk of significant losses. However, potential drawbacks include privacy concerns and the need for robust processing systems to handle high volumes of alert data efficiently .

The subsidiary ledger plays a key role in detailing individual transactions and maintaining comprehensive records for specific accounts (e.g., customers or suppliers) in modern accounting systems. It contrasts with traditional ledgers by allowing for nuanced transaction tracking without cluttering the general ledger, thereby improving detailed reporting and account reconciliation .

Parallel processing is critical in auditing because it allows auditors to reprocess transaction data through a program parallel to live systems, enabling the detection of discrepancies between expected and actual data processing. This ensures data integrity and verifies system correctness without disrupting live operations .

CCTV installed in the server room serves as a general control to ensure physical security and safeguard the server environment against unauthorized access, tampering, or theft .

The authorization signature feature in accounting packages enhances security by restricting access and actions to privileged users, ensuring that only authorized personnel can perform administrative tasks such as viewing audit logs. This control measure prevents unauthorized alterations, compounding the system's integrity and accountability .

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