The auditor used the reporting capabilities of the fourth-generation (4GL) to analyze the

data files for unusual activity such as excessive overtime hours, unusual fluctuations in
pay rates, or excessive vacation time. The application controls being verified by this
analysis are:
Edit and validation controls.
Rejected and suspense item controls.
Controls over update access to the
database.
Programmed balancing controls.
Correct. Edit or validation routines should be present in the application to
reject or flag these unusual items (IIA Standard 2130—Control).
Incorrect. Rejected and suspense item controls are relevant only if the data
are first subject to edit and validation checks.
Incorrect. Controls over update access to the database are general controls
rather than application controls.
Incorrect. Programmed balancing controls are designed to identify errors in
the processing of data rather than in the data itself.
Which of the following paired items have a direct relationship with each other?
Production volume and production
costs
Audit risk scores and audit cycle
frequency
Tolerable error and sample size
Precision limits and sample size
Correct. Production volume and production costs have a direct relationship
with each other. As the production volume increases, the associated
production costs would also increase.
Incorrect. Audit risk scores and audit cycle frequency have an inverse
relationship with each other. As the audit risk scores increase, the audit cycle
frequency gets decreased (i.e., shorter time intervals between audits to
address higher risk areas).
Incorrect. Tolerable error and sample size have an inverse relationship with
each other. The lower the tolerance for error, the larger the number of items
that needs to be selected in a sample (i.e., need a larger sample size).
Incorrect. Precision limits and sample size have an inverse relationship with
each other. The smaller the precision limits, the larger the size of the sample
selected.