A primary advantage of using CAATs in the audit of an advanced computerized system is that it enables the auditor to
a. substantiate the accuracy of data through self-checking digits and hash totals
b. utilise the speed and accuracy of the computer
c. verify the performance of machine operations that leave visible evidence of occurrence
d. gather and store large quantities of supportive audit evidence in machine-readable form
Answer: b. utilise the speed and accuracy of the computer
An audit plan contains
a. specifications of audit standards relevant to the financial statements being audited
b. documentation of the assertions under audit, the evidence obtained, and the conclusions reached
c. specifications of procedures that auditors believe appropriate for the financial statements under audit
d. reconciliation of the account balances in the financial statements with the account balances in the client's general ledger
Answer: c. specifications of procedures that auditors believe appropriate for the financial statements under audit
If sales were overstated by recording a false credit sale at the end of the year, where could you find the false "dangling debit?"
a. cost of goods sold
b. inventory
c. bad debt expense
d. accounts receivable
Answer: d. accounts receivable
