Question

The greatest drawback of an integrated test facility is that:

a) It requires the construction of a high volume of test data
b) It introduces artificial transactions into the transaction stream
c) It produces overkill in the audit function
d) It is not broad enough to cover the entire spectrum of activities involved in the AIS

Answer 1

The main drawback of an integrated test facility (ITF) is the introduction of artificial transactions into the live transaction stream, which requires careful management to avoid processing them as real.

Step-by-step explanation:

The greatest drawback of an integrated test facility (ITF) within an audit function is that it introduces artificial transactions into the transaction stream. This method of testing involves setting up a fictitious environment or dummy entity within the organization's processing system to evaluate the control effectiveness.

While this enables auditors to test controls during the normal processing of transactions, the artificial transactions might mix with real data, thus requiring careful coding and monitoring to ensure they can be identified and are not processed as real transactions. In contrast, ITFs are designed to be unnoticed by the system's regular users, so these test transactions can assess the system without alerting the personnel handling daily transactions, thereby maintaining the integrity of the audit check.