Page 167 - CITP Review

4.
a. Incorrect. This control is intended to mitigate some of the IR. The IT director has some
probability of identifying or recognizing errors or fraud in significant applications.
b. Incorrect. This control is intended to mitigate some of the IR. Some SoD is better than
none.

c. Incorrect. This control is intended to mitigate some of the IR. Knowing the risks that
could occur and analyzing them should reduce the occurrence of potential risks.

d. Correct. Although performing a physical inventory count is an important part of an
inventory audit, it does nothing to mitigate the IR risk of the custom inventory
application. All of the other controls noted in the case, including the manual controls, are
intended to mitigate the IR.

5.

a. Incorrect. SAS clearly states that auditors are intended to draw conclusions in their work.
b. Incorrect. Adequately planning the audit is very important, but it is not something
specifically required by SAS. This is instead required by the first standard of fieldwork.
c. Correct. This is the first step of auditing fieldwork required by SAS.
d. Incorrect. Evaluating the entity’s long-term strategy may be part of an engagement, but it
is not something required by SAS.

6.

a. Incorrect. Although a test could be designed to test a sample of depreciation
calculations, using CAATs and 100% of the transactions and testing an automated
calculation are best suited for testing calculations.

b. Incorrect. Although a test might be designed to test depreciation calculations by
summarizing data, using CAATs and 100% of the transactions and testing an automated
calculation are best suited for testing calculations.
c. Incorrect. It may be possible to test depreciation calculations using data file
comparisons, using CAATs and 100% of the transactions and testing an automated
calculation are best suited for testing calculations.
d. Correct. This test is reperformance of an automated calculation and is therefore
categorized as testing calculations and making computations.

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