Information Technology Control and Audit notes

1. What is the purpose of an IT audit? Response: The purpose of an IT audit is to provide an independent assessment of some technology- or systems-related object, such as proper IT implementation, or controls over computer resources. Because most modern accounting information systems use IT, IT plays a significant role in a financial (external audit), where the purpose is to determine the fairness and accuracy of the financial statements. 2. Discuss the concept of independence within the c...

1. A city levies property taxes in the amount of $4,000,000. Experience shows that about $100,000 of the amount levied will not be collected. Answer: Property taxes receivable 4,000,000 Allowance for refunds and uncollectible taxes 100,000 Revenues – property taxes 3,900,000 Practice Exercise © Cambridge Business Publishers 17 2. A city collects cash of $3,800,000 on the property tax levy. Answer: Cash 3,800,000 Property taxes receivable 3,800,000 Record Property Tax Entries ©...

1. Corporate management (including the CEO) must certify monthly and annually their organization’s internal controls over financial reporting. ANS: F PTS: 1 2. Both the SEC and the PCAOB require management to use the COBIT framework for assessing internal control adequacy. ANS: F PTS: 1 3. Both the SEC and the PCAOB require management to use the COSO framework for assessing internal control adequacy. ANS: F PTS: 1 4. A qualified opinion on management’s assessment of internal control...

1. A city levies property taxes in the amount of $4,000,000. Experience shows that about $100,000 of the amount levied will not be collected. Answer: Property taxes receivable 4,000,000 Allowance for refunds and uncollectible taxes 100,000 Revenues – property taxes 3,900,000 Practice Exercise © Cambridge Business Publishers 17 2. A city collects cash of $3,800,000 on the property tax levy. Answer: Cash 3,800,000 Property taxes receivable 3,800,000 Record Property Tax Entries ©...

1. Corporate management (including the CEO) must certify monthly and annually their organization’s internal controls over financial reporting. ANS: F PTS: 1 2. Both the SEC and the PCAOB require management to use the COBIT framework for assessing internal control adequacy. ANS: F PTS: 1 3. Both the SEC and the PCAOB require management to use the COSO framework for assessing internal control adequacy. ANS: F PTS: 1 4. A qualified opinion on management’s assessment of internal control...

1. What is the purpose of an IT audit? Response: The purpose of an IT audit is to provide an independent assessment of some technology- or systems-related object, such as proper IT implementation, or controls over computer resources. Because most modern accounting information systems use IT, IT plays a significant role in a financial (external audit), where the purpose is to determine the fairness and accuracy of the financial statements. 2. Discuss the concept of independence within the c...