Exam 3: Internal Control Over Financial Reporting: Managements Responsibilities and Importance to the External Auditors

Which one of the following components of the system of internal controls influences the tone for the organization?

Preventive controls are designed to provide reasonable assurance that the correct program is used for processing,all transactions are processed,and the transactions update appropriate files.

An auditor is not required to obtain evidence about the design and operation of the internal controls to conclude the controls are effective at preventing material misstatements from occurring.

Which of the following is not a major components of an organization's internal controls?

Which of the following is an example of a control environment deficiency??

Integrated audit Explain the application of an integrated audit as it relates to regulation.Discuss the reasons that this integrated approach may occur.

Physical controls to safeguard assets are not intended to include simple controls such as fences and locks.

Which of the following is an inherent limitation of internal controls?

Physical controls are necessary to protect and safeguard assets from accidental or intentional destruction and theft.

One of the components of internal control,monitoring,refers to the process of identifying,capturing,and exchanging information in a timely fashion to enable accomplishment of the organization's objectives.

Which one of the following groups is interested in an organization's control structure?

Pervasive control activities Discuss what pervasive control activities are and provide an example of at least three.

The auditor's preliminary assessment of internal control effectiveness is based on an understanding of the control system as it has operated in the past and is designed to operate.

Internal control components and principles For each of the five components of internal control,list at least two related principles of internal control. n gathering the information and briefly describe each one.

Which of the following is not a major components of an organization's internal control structure?

What is the component of COSO's internal control system that concerns the process of identifying,capturing,and exchanging information in a timely fashion to enable accomplishment of the organization's objective called?

Which of the following is not one of the underlying principles of an effective control environment as developed by COSO?

Which of the following is clearly a test of controls?

The payroll department should be responsible for signing payroll checks.

The quality of an organization's internal control will affect both the audit approach and the amount of testing needed for an engagement.