Technology & Digital Applications Flashcards
7 cards from real Certified Public Accountant practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Technology & Digital Applications flashcards as text
A CPA firm is implementing a cloud-based accounting system. Which control is MOST critical to establish before migrating sensitive client data?
Answer: Data encryption in transit and at rest
Encryption of data both in transit and at rest is the foundational control for protecting sensitive client financial data in cloud environments.
Under the AICPA's SOC 2 framework, which Trust Services Criterion addresses the system's availability for operation and use?
Answer: Availability
The Availability criterion in SOC 2 addresses whether the system is available for operation and use as committed or agreed upon.
A company uses robotic process automation (RPA) to process vendor invoices. What is the PRIMARY audit risk introduced by RPA?
Answer: Errors or fraud propagating at machine speed without human review
RPA can execute thousands of transactions rapidly, meaning a misconfigured rule or fraudulent input can propagate errors at scale before detection.
Which data analytics technique is BEST suited for identifying unusual journal entries that may indicate financial statement fraud?
Answer: Benford's Law analysis
Benford's Law analysis tests whether the leading digits in financial data follow a natural logarithmic distribution, deviations from which can signal manipulation.
An ERP system upgrade is planned during a client's fiscal year-end. What is the auditor's PRIMARY concern?
Answer: Migration completeness and accuracy of historical data transferred
Data migration errors during an ERP upgrade can cause incomplete or inaccurate financial records, directly affecting audit evidence reliability.
Which of the following BEST describes a 'general IT control' as opposed to an 'application control'?
Answer: A pervasive control such as access management that supports multiple applications
General IT controls (e.g., logical access, change management, IT operations) are pervasive and underpin the reliability of application-level controls across the entire IT environment.
A client stores financial records using a distributed ledger (blockchain). Which characteristic of blockchain is MOST relevant to auditor reliance on those records?
Answer: Immutability of confirmed transaction records
Blockchain's immutability means confirmed records cannot be altered without consensus, which supports the integrity and reliability of recorded transactions for audit purposes.