Question

The auditor's objective in determining whether the client's computer program correctly processes valid and invalid transactions is accomplished through the:

1) test data approach.
2) generalized audit software approach.
3) microcomputer-aided auditing approach.
4) generally accepted auditing standards.

Answer 1

The auditor's objective in determining whether the client's computer program correctly processes transactions is accomplished through the test data approach.

Step-by-step explanation:

The auditor's objective in determining whether the client's computer program correctly processes valid and invalid transactions is accomplished through the test data approach. This approach involves creating a set of test data that includes both valid and invalid transactions and running it through the client's computer program. The auditor then compares the expected output with the actual output to determine if the program is functioning correctly.

While the generalized audit software approach may be used in other aspects of auditing, it is not specifically designed for testing the processing of valid and invalid transactions. The microcomputer-aided auditing approach refers to the use of microcomputers in the auditing process but does not specifically address the objective of testing computer programs. Finally, the generally accepted auditing standards provide a set of guidelines and principles for auditors to follow but do not directly address the testing of computer programs.