Question

Auditing by testing automated internal controls and account balances electronically, generally because effective general controls exist, is known as?

1) auditing through the computer.
2) auditing around the computer.
3) embedded audit module approach.
4) parallel simulation testing.

Answer 1

The correct answer is 1) auditing through the computer.

Step-by-step explanation:

Auditing through the computer refers to the process of testing automated internal controls and account balances electronically, taking advantage of effective general controls that are in place. This approach allows auditors to rely on the accuracy and effectiveness of the automated systems and perform audit procedures electronically, rather than manually.

For example, auditors can use computer-assisted audit techniques (CAATs) to extract data from the system, perform analytical procedures, and test the controls and account balances.