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CMA Intermediate · Corporate Accounting and Auditing · Application of Technology in Audit and Audit Trail

An auditor uses audit software to read the client's receivables master file and list all customer balances exceeding the credit limit approved in the system. This use of CAATs is best described as:

This is audit software testing file data against a criterion. The auditor's program reads the real receivables master file and selects balances above the approved credit limit. It does not submit dummy transactions to the client's programs, so it is not test data or an integrated test facility.

  1. AAudit software used to test file data against a defined criterionCorrect
  2. BTest data applied to the client's application programs
  3. CIntegrated test facility run within live processing
  4. DManual vouching of a sample of invoices

Explanation

Audit software reads the client's actual data files and extracts items meeting set criteria, such as balances above the credit limit. Test data, by contrast, feeds dummy transactions into the client's programs to test processing logic. Here no dummy transactions are processed, so option 2 is wrong.

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