CMA Part 1 SU 10

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  1. Spoofing is one type of online activity used to launch malicious attacks. Spoofing is 

    A. Eavesdropping on information sent by a user to the host computer of a website.
    B. Identity misrepresentation in cyberspace. 
    C. Trying large numbers of letter and number combinations to access a network.
    D. Accessing packets flowing through a network.
    • Answer B is correct.
    • Passwords, user account numbers, and other information may be stolen using techniques such as Trojan horses, IP spoofing, and packet sniffers.

    Spoofing is identity misrepresentation in cyberspace, for example, by using a false website to obtain information about visitors.
  2. Which one of the following statements concerning concurrent auditing techniques is false?

    A. They are most useful in complex online systems in which audit trails have either become diminished or are very limited.
    B. They are standard components of generic software packages.
    C. They allow faster detection of unauthorized transactions.
    D. They allow monitoring a system on a continuous basis for fraudulent transactions.
    • Answer B is correct.
    • The primary use of generalized audit software (GAS) is to select and summarize a client’s records for additional testing. These packages permit the auditor to audit through the computer; to extract, compare, analyze, and summarize data; and to generate output for use in the audit.

    They allow the auditor to exploit the computer to examine many more records than otherwise possible with far greater speed and accuracy. Hence, GAS facilitates analysis of all sources of potential error.

    However, concurrent auditing techniques are not included because they must be incorporated into the client’s systems. For example, embedded audit data collection is a transaction selection approach incorporated within the regular production programs to routinely extract transactions meeting certain criteria for further testing.

    In effect, it provides a window through which the auditor can access the process.
  3. An external auditor’s primary consideration when assessing a company’s internal control structure policies and procedures is whether they 

    A. Affect the financial statement assertions. 
    B. Reflect management’s philosophy and operating style.
    C. Prevent management override.
    D. Relate to the control environment.
    • Answer A is correct.
    • Management makes certain assertions about the financial statements (existence, rights and obligations, etc.). The goal of an audit is to assess the fair presentation of the financial statements. The auditor’s consideration of the client’s system of internal control is a means to that end.
  4. An accounting system identification code that uses a sum-of-digits check digit will detect all of the following errors except 

    A. Transcription errors.
    B. Transposition errors.
    C. Validity errors.
    D. Completeness errors.
    • Answer B is correct.
    • Self-checking digits may be used to detect incorrect identification numbers. The digit is generated by applying an algorithm to the ID number. During the input process, the check digit is recomputed by applying the same algorithm to the code actually entered.

    If the check digit is merely a sum, transposition errors will not be detected because the sum will be unaffected.
  5. In recent years, which two factors have changed the relationship between internal auditors and external auditors so that internal auditors are partners rather than subordinates?

    A. The increasing professionalism of internal auditors and the evolving economics of external auditing.
    B. The increasing liability of external auditors and the increasing professionalism of internal auditors.
    C. The use of computerized accounting systems and the evolving economics of external auditing.
    D. The globalization of audit entities and the increased reliance on computerized accounting systems.
    • Answer A is correct.
    • An external auditor may decide that the internal auditors’ work will have an effect on audit procedures if (1) that work is relevant, (2) it is efficient to consider how the work may affect the audit, and (3) the external auditor determines that the internal auditors are sufficiently competent and objective.

    Hence, internal auditors may be viewed as partners in the audit because of their increasing professionalism. Moreover, the evolving economics of external auditing creates an imperative to control audit fees by eliminating duplication of effort and monitoring more closely the hours worked by external auditors.
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CMA Part 1 SU 10
CMA Part 1 SU 10
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