Chapter 7:Internal Control
Question1:
Because of the Inherent inconsistency of automated controls, auditors will test them at various times in the year to determine their operating effectiveness.
Question2:
A correct response by management to an assessment of risk could include taking no action because the risk is consistent with the risk tolerance of the organization.
Question3:
A primary objective of procedures performed to obtain an understanding of internal control is to provide an auditor with
Question4:
An example of a corrective control would be to maintain backup copies of key transactions and master files in case of data entry errors.
Question5:
All of the following are considered to be factors indicating increased financial reporting risk except:
True. As it's automated and auditors always look in for accurate information they will test at various times to get the effectiveness.
Chapter 7:Internal Control Question1: Because of the Inherent inconsistency of automated controls, auditors will test them...
1. Consider the following statements: I. Per COSO, Control Activities are the policies and procedures that help insure that management’s directives are carried out. II. A Reliance Strategy is used when control risk is considered High. a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false 2. Management's attitude toward aggressive financial reporting and its...
1A qualified opinion that is issued because of a departure from generally accepted accounting principles should contain a separate paragraph explaining the departure and its effects. True False 2 The introductory paragraph of the auditors’ report clarifies management’s responsibility for the financial statements. True False 3The phrase “generally accepted auditing standards” appears in the scope paragraph of the auditors’ standard report. True False 4An auditors’ report is in essence a guarantee by the auditors that the financial statements are correct....
1. Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? A. Management's failure to renegotiate unfavorable long-term purchase commitments.B. Recurring operating losses that may indicate going concern problems.C. Evidence of a lack of objectivity by those responsible for accounting decisions.D. Management's current plans to reduce its ownership equity in the entity. 2. After obtaining an understanding of internal control and arriving at a preliminary assessed level...