Question

1. Which of the following best description of ERP system?

Select one: a. It enables company to provide services and conduct marketing activities online b. It is a combination of hardware and software system to prevent unauthorized system access c. It involves the computer-to-computer exchange of business documents in electronic form between organizations d. It is a modular software system that enables organizations to integrate their business processes using a single operating database

2.

Which of the following is a risk source that will likely cause the greatest concerns from auditor during a risk-based audit?

Select one:

a. Increased transaction volume

b. Newly developed logistics and supplier system

c. New orders from existing customers

d. Increased dollars processed in accounts payable

Answer 1

QUESTION 1 : Enterprise Resource Planning (ERP) is an software that integrates a firms all activities like financing , marketing , human management in a single operating database. It is a wide information system that control all the business processes. So the best option would be (d) it is a modular software system that enables organisation to integrate their business processes using a single database. Other options are not appropriate as option (d) is. Option (a) is not correct because it not just provide online marketing activities. Similarly option (b) is also not true because ERP is a software not a combination of software and hardware. Hardware has nothing to do with ERP. Option (c) is also not true because ERP integrates a business's various activities in an integrated software . This is the main job of this system not to exchange documents on computer to computer between organisations.

QUESTION 2 : RISK BASED AUDITING is an advanced form of traditional auditing or we can say risk based auditing is superior than traditional auditing. In RISK BASED AUDITING the auditors not only analyse the accounting transaction but also gives ideas about the risks involved in various situations like control risk , detection risk etc .

Show the best option would be ( b) newly developed logistic and supplier system. This statement do not focus on the fairness of accounting statements but says about the new pattern of supply system and the risk associated with it. While option (a) , (c) , (d) mainly relates to the accounting treatments or we can say these options mainly stresses on financial statements.