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Which of the following statements is false about the test data approach when testing a computerized...

Which of the following statements is false about the test data approach when testing a computerized accounting system?

a. Controls may only be tested for one moment in time.

b. An advantage of this method is that it directly tests controls.

c. Several transactions of each type must be tested.

d. Only those controls deemed important to the auditor need to be tested.

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Answer #1

Solution:

The false statement about the test data approach when testing a computerized accounting system is "Several transactions of each type must be tested."

Explanation:

The test data approach includes preparation of dummy transactions by the auditor. These transactions are processed by the client’s computer programs under the auditor’s control. The test data consist of one transaction for each valid and invalid condition that interests the auditor. The computer processes all similar transactions in the same way. Accordingly, only one transaction needs to be tested to determine whether a control is working effectively.

Hence option c is correct.

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