Certified Public Accountant Technology & Digital Applications 2

Question 1

A CPA firm is implementing a cloud-based accounting system. Which control is MOST critical to establish before migrating sensitive client data?

Accepted Answer

Data encryption in transit and at rest

Answer

Encryption of data both in transit and at rest is the foundational control for protecting sensitive client financial data in cloud environments.

Question 2

Under the AICPA's SOC 2 framework, which Trust Services Criterion addresses the system's availability for operation and use?

Accepted Answer

Availability

Answer

The Availability criterion in SOC 2 addresses whether the system is available for operation and use as committed or agreed upon.

Question 3

A company uses robotic process automation (RPA) to process vendor invoices. What is the PRIMARY audit risk introduced by RPA?

Accepted Answer

Errors or fraud propagating at machine speed without human review

Answer

RPA can execute thousands of transactions rapidly, meaning a misconfigured rule or fraudulent input can propagate errors at scale before detection.

Question 4

Which data analytics technique is BEST suited for identifying unusual journal entries that may indicate financial statement fraud?

Accepted Answer

Benford's Law analysis

Answer

Benford's Law analysis tests whether the leading digits in financial data follow a natural logarithmic distribution, deviations from which can signal manipulation.

Question 5

An ERP system upgrade is planned during a client's fiscal year-end. What is the auditor's PRIMARY concern?

Accepted Answer

Migration completeness and accuracy of historical data transferred

Answer

Data migration errors during an ERP upgrade can cause incomplete or inaccurate financial records, directly affecting audit evidence reliability.

Certified Public Accountant Practice Test

Certified Public Accountant Practice Test

Certified Public Accountant Technology & Digital Applications 2