Question

1)An effective and robust system of internal control ________.

A) should be carefully examined to see if the benefits outweigh the costs of providing such a system

B) will eliminate all risks related to entity objectives

C) will guarantee that the entity will meet its objectives

D) can only provide an entity with reasonable assurance in achieving its financial reporting objectives

2) Physical controls are concerned with limiting ________.

A) the informational output of the firm

B) access to accounting information to senior managers only

C) investors access to certain records of the firm which should be kept private

D) physical access to assets to those authorized to have access

3) Compensating controls are described as ________.

A) controls that are determined to be redundant after analysis

B) controls that have been determined by the auditor to be effective

C) controls that deal with monetary compensation for employees and contractors

D) controls that compensate for another control’s potential ineffectiveness

Answer 1

Ans 1

D) can only provide an entity with reasonable assurance in achieving its financial reporting objectives.

Ans 2

D) physical access to assets to those authorized to have access.

Ans 3

D) controls that compensate for another control’s potential ineffectiveness.

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