Auditing and Attestation

4.  Pablo makes extensive use of electronic data processing.  Which of the following does not describe a possible effect on internal control?
a.  Use of information technology makes it more difficult to appropriately monitor internal controls.
b.  An increase in the risk of unauthorized access to accounting data may negatively impact the control environment.
c.  User controls may be dependent on the accuracy of the information technology system.
d.  The use of information technology often provides more timely information, allowing a more effective assessment of risks facing the company.

Choice a is correct.  Use of information technology does not necessarily make it more difficult to monitor internal controls, as long as the information technology system provides accurate information.

Choice b is incorrect.  Extensive use of information technology does increase the risk of unauthorized access.  If management does not appropriately address this increased risk, the control environment may be negatively impacted.

Choice c is incorrect.  User controls are often dependent on the accuracy of the information provided by the information technology system.

Choice d is incorrect.  The use of information technology often enhances an entity's risk assessment by providing more timely information.