When testing a computerized accounting system, which statement is not true about the test data approach?

• A. The test data need consist of only those valid and invalid conditions in which the auditor is interested
• B. Only one transaction of each type need be tested
• C. Test data are processed by the client's computer programs under the auditor's control
• D. The test data must consist of all possible valid and invalid conditions

Answer: (D)

The test data approach relies on validating how the program processes inputs by running a carefully chosen set of data through the system, including both valid and invalid cases. The emphasis is on exercising the processing logic and error handling with representative scenarios, not on trying to cover every possible input the system could ever encounter. This is practical because exhaustive testing of all valid and invalid conditions in a complex accounting system is usually infeasible. Data are prepared and processed on the client’s computer under the auditor’s control, so the auditor can observe outputs and compare them with expected results. It’s common to use a baseline set—often one transaction of each type—as a starting point for testing, with additional tests added as needed. Therefore, the claim that all possible valid and invalid conditions must be used is not true.