AUD Module III

which of the following most likely would not considered an inherent limitation the potential effectiveness of an entity's internal control

when considering internal control, and auditor should be aware of the concept of reasonable assurance, which recognizes that

proper segregation of functional responsibilities calls for separation of functions of

and entities ongoing monitoring activities often include

the overall attitude in awareness of and entities Board of Directors concerning the importance of internal control usually is reflected in its

management philosophy and operating style most likely would have a significant influence on and entities control environment when

which of the following factors are included in an entity's control environment

which of the following is not a component of an entity's internal control

which of the following is a provision of the foreign corrupt practices act

an audit tour suspects that certain client employees are ordering merchandise for themselves over the Internet without recording the purchase or receipt of the merchandise. When vendors invoices arrive, one of the employees approves the invoices for payment. After the invoices are paid, the employee destroys the invoices and the related vouchers. In gathering evidence regarding the fraud, the auditor most likely would select items for testing from the file of all

which of the following procedures most likely would provide an auditor with evidence about whether in entities internal control activities are suitably designed to prevent or detect material misstatements?

which statement is correct concerning the relevance of various types of controls to a financial audit?

In an audit of financial statements in accordance with generally accepted auditing standards, GaAs, and auditory is required to

in obtaining an understanding of an entity's internal control relevant to audit planning, and auditor is required to obtain knowledge about the

and auditor should obtain sufficient knowledge of an entities information system to understand the

when obtaining an understanding of an entities internal control, and auditors should concentrate on the substance of controls rather than their form because

decision tables differ from program flowcharts and that decision tables emphasize

during the consideration of internal control in the financial statement audit, and auditor is not obligated to

a primary objective of procedures performed to obtain an understanding of internal control is to provide an auditor with

which of the following statements regarding auditor documentation of the clients internal control is correct

in obtaining an understanding of an entity's internal control, and auditor is required to obtain knowledge about the

which of the following may not be required on a particular audit of a nonissue or, nonpublic, company

control risk should be assessed in terms of

after assessing control risk, and auditor decides to seek further reduction in the assessed level of control risk. At this time, the auditor would consider whether

assessing control risk and the low level most likely would involve

in auditor assesses control risk because it

when in auditor increases the assessed level of control risk because certain control activities were determined to be ineffective, the auditor most likely increase the

in auditor uses the knowledge provided by the understanding of internal control in the assessed level of the risk of material misstatement permanent early to

in auditor may compensate for weakness in internal control by increasing the

which of the following statements is correct concerning and auditors assessment of control risk

regardless of the assessed level of control risk, and auditor would form some

how frequently must and auditor test operating effectiveness of controls that appear to function as they have in past years and knowledge the auditor wishes to rely in the current year

before assessing control risk at a level lower than the maximum, the auditor obtains reasonable assurance that controls are in use in operating effectively. This assurance is most likely obtained in part by

in auditor general least tests the segregation of duties related to inventory by

the objective of tests of details of transactions performed this tests of controls is to

after obtaining an understanding of internal control and assessing the risk of material misstatement, and auditor decided to form tests of controls. The auditor most likely decided that

in assessing control risk, and auditor ordinarily selects from a variety of techniques, including

which of the following types of evidence would in auditor most likely examined to determine whether controls are operating as designed

which of the following is not a step in an auditors assessment of control risk

to obtain audit evidence about control risk, and auditor selects tests from a variety of techniques including

which of the following is least likely to be evidence the auditor examines determine whether controls are operating effectively

which of the following procedures concerning Accounts Receivable within auditor most likely perform to obtain evidence in support of an assessed level of control risk below the maximum

internal control provisions of the Sarbanes-Oxley act of 2002 apply to which companies in the US

the framework most likely to be used by management and its internal control assessment under requirements of the Sarbanes-Oxley act of 2002 is the

which of the following is correct concerning the level of assistance auditors may provide in assisting management with its assessment of internal control

which of the following need not be included in management's report on internal control under section 404 a of the Sarbanes-Oxley act of 2002

which of the following is an accurate statement about internal control weaknesses

in an integrated audit, which of the following is defined as a weakness in internal control that is less severe than a material weakness important enough to warrant attention by those responsible for oversight of the financial reporting function

material weakness is a significant deficiency or combination of significant deficiencies that results of a reasonable possibility that a misstatement of at least what amount will not be prevented or detected

the minimum likelihood of loss involved in the consideration of a control deficiency is

assume the company has a control deficiency regarding the processing of cash receipts. Reconciliation of cash accounts by competent individual otherwise independent of the cash function might make the likelihood of the significant misstatement due to the control deficiency remote. In this situation, reconciliation may be referred to as what type of control

according to public company accounting oversight board standard five, what type of transaction involves establishing a loan-loss reserve

it procedure that involves tracing a transaction from origin nation to the company's information systems until it is reflected in the company's financial report is referred to as a

for purposes of an audit of internal control performed under public company accounting oversight board standards, the as of date is ordinarily

Consider a public company whose purchases are made to the Internet and by telephone. Which of the following is correct

for public company audit of internal control, walk-throughs provide the auditor primary evidence to

which is most likely to be a question asked of employee personnel during a walk-through an audit of the internal control of a public company

how large must the actual loss identified by the auditor be for control deficiency to possibly be considered a material weakness

for purposes of an audit of internal control performed under public company accounting oversight board requirements, and account the significant if there is more than a

a controlled efficiency that is more than a significant deficiency is most likely to result in what form of audit opinion relating to internal control

which of the following is most likely to be considered a material weakness in internal control for purposes of an internal troll audit of a public company

inability to evaluate internal control due to the circumstance caused scope limitation relating to a significant account in the Sarbanes-Oxley 404 internal control audit is most likely to result in a

which of the following is most likely to indicate a significant deficiency relating to a clients antifraud programs

and auditor identified a material weakness in December. The client was informed and corrected it shortly after the as of date December 31, the auditor agrees that the correction aluminous the material weakness as of January 31.. The appropriate report under a PCAOB standard five audit of internal control is

in an integrated audit, which of the following leads to an adverse opinion on can internal control

an integrated audit, what must the auditor communicate to the audit committee

in which manner a significant deficiencies communicated by the auditors to the audit committee under public company accounting oversight board standard five

which is correct concerning the external auditors use of the work of others an audit of internal control perform for public company

an integrated audit, which must the auditor communicate in writing on to management

which of the following is correct when applying a top-down approach to identify controls to test an integrated audit

which of the following is not included in the standard unqualified opinion on internal control over financial reporting performed under PCAOB requirements

walk-throughs ordinarily provide evidence it helps the auditor to

which of the following procedures would and auditor most likely performed to test controls relating to management's assertion about the completeness of cash receipts for cash sales at a retail outlet

sound internal control dictates that immediately upon receiving checks from customers by mail, a responsible employee should

tracing shipping documents to prenumbered sales invoices provides evidence that

which of the following controls most likely would reduce the risk of diversion of customer receipts by and entities employees

and auditor some suspects the client cashier is misappropriating cash receipts for personal use by lapping customer checks received in the mail. In attempting to uncover this embezzlement scheme the auditor most likely would compare the

upon receipt of customers checks in the mail room, responsible employee should prepare a remittance listing that is forwarded to the cashier. A copy of the listing should be sent to the

which of the following procedures most likely would not be a control designed to reduce the risk of misstatements in the billing process

which of the following audit procedures within auditor most likely performed to test controls relating to management assertion concerning the completeness of sales transactions

which of the following controls most likely would assure that all bills sales are correctly posted to the Accounts Receivable ledger

and auditor tests and entities policy of obtaining credit approval before shipping goods to customers in support of management financial statement assertion of

which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded

which of the following controls most likely would be effective it in offsetting the tendency of sales personnel to maximize sales volume at the expense of high bad debtwrite-offs

proper authorization of write-offs of uncollectible accounts should be approved in which of the following departments

employers bond employees who handle cash receipts because fidelity bonds reduce the possibility of employing dishonest individuals and

during consideration of the small business clients internal control, the auditor discovered that the Accounts Receivable work approves credit memos and has asked us to cash. Which of the following controls would be most effective in offsetting this weakness?

when a customer fails to include a remittance advice with the payment, it is common practice for the person opening the mail to pair one. Consequently, mail should be open by which of the following for company employees

to provide assurance that each voucher is submitted and paid only once, and auditor most likely would examine a sample of pay vouchers and determine whether each voucher is

in testing controls over cash disbursements, an auditor most likely would determine that the person who signs checks also

in assessing control risk for purchases and auditor poaches a sample of entries in the voter register to the supporting documents. Which assertion with this test of controls most likely support

which of the following controls is not usually performed in the vouchers payable department

with properly designed internal control, the same employee most likely would match vendors invoices with receiving reports and also

an entity's internal control requires for every check request that there be improved voucher, supported by a prenumbered purchase order and a prenumbered receiving report. To determine whether checks are being issued for unauthorized expenditures, and auditor most likely would select items for testing the population of all

which of the following questions would most likely be included in internal control questionnaire concerning completeness assertion for purchases

for effective internal control, the Accounts Payable department generally should

internal control is strengthened when the quantity of merchandise ordered is omitted from the copy of the purchase order sent to the

the client erroneously recorded a large purchase twice. Which of the following internal control measures would be most likely to detect this error in a timely and efficient manner

with well-designed internal control, employees in the same department most likely would approve purchase orders, and also

in obtaining an understanding of a manufacturing entities internal control over inventory balances, and auditor most likely would

which of the following controls most likely would be used to maintain accurate inventory records

the client maintains perpetual inventory records in both wannabes in dollars. If the assessed level of control risk is high, and auditor would probably

which of the following controls most likely addresses the completeness assertion for inventory

sound internal control dictates that effective merchandise return by customers should be presented initially to the

A company uses its sales invoices for posting perpetual inventory records inadequate controls over the invoicing function allows goods to be shipped that are not invoiced inadequate controls because in

of the following is a question that the auditor would expect to find on the production cycle section of internal control questionnaire

the objectives of internal control for production cycle are to provide assurance that transactions are properly executed and recorded and that