Question

When using the test data approach,

A) auditors process test data supplied by the client.
B) auditors often obtain assistance from a computer audit specialist.
C) the tests must be performed at the end of the year.
D) the test data must remain in the client's records.

Answer 1

The test data approach in auditing involves auditors processing specifically prepared test data, often with the help of a computer audit specialist, and is not restricted to end-of-year testing. After the audit, test data should be removed from the client's records.

Step-by-step explanation:

When using the test data approach, auditors process test data specifically prepared for the audit, rather than using data supplied by the client. This approach allows auditors to evaluate the effectiveness of internal control procedures and the integrity of the system. It is common for auditors to obtain assistance from a computer audit specialist, particularly when complex information systems are being tested.

There is no requirement that the tests must be performed at the end of the year; they can be conducted at any time during the audit process. Furthermore, the test data should not remain in the client's records after the audit tests are complete, to ensure the normal operations of the client's systems are not affected.