When an auditor tests the internal controls of a computerized accounting system, which of the following is true of the test data approach?

d

"D" is the answer. As predetermined result (criteria/ standard), is compared with actual result. Less variance means better internal control.

Option D) is the right answer.

When an auditor test the internal controls, He/she usually use the sequential method starting from creating the purchase requisition to the end of the payment cycle. He/she checks the impact of each transaction on the General ledger and compare it with predetemined results to check the internal controls of the computerized accounting system  

Test data programs usually consist of all possible valid and invalid conditions regarding compliance with internal controls.

The answer is:

d. Test data are processed with the client's computer and the results are compared with the auditor's predetermined results.

In my opinion option d is correct.  Test data contains all tables which have to be combined under process to extract required results.

d

Test data will vary with the business control requirements, which in turn will depend on factors like the industry the client is in, regulatory requirements for the accounting data, etc. Having said that, one or more of the4 options will be true for a particular client. 

i.e.

1. Option a may not be true if by moving the accounting to a subsidiary, the accounting entries will cause other entries to be passed based on regulatory requirements.
2. For clients in the same industry and geographical location, the same test data can be reused
3. Test data should ideally have all possible correct and incorrect values, however, it is practically difficult to identify all incorrect and/or correct scenarios
4. Testing means comparing actual to expected results. However, any differences do not mean that the control is incorrectly implemented but needs to be investigated further.