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

Which of the following is not part of the control environment of an organization?

Control activities may be implemented at the organizational level and at the transactional level.

Which of the following documents will an auditor use to demonstrate an understanding of internal control?

Management Evaluation of Internal Controls What are the steps in management's evaluation of internal control over financial reporting?

Investors and lenders are not concerned with internal control of the companies in which they invest.

An organization's control environment is established and maintained by the internal auditing department.

Which component of COSO's internal control system concerns the process that provides feedback on the effectiveness of the other four components of internal control?

Which of the following is not part of the control environment?

All organizations should evaluates and communicates internal control deficiencies in a timely manner to those parties responsible for taking corrective action,including senior management and the board of directors,as appropriate.

How can an auditor use inquiry to gain a better understanding of internal controls?

Control activities implemented to mitigate transaction processing risk that typically affect only certain processes,transactions,accounts,and assertions are referred as transaction or application controls.

Internal control are needed for all activities of the organization

Which of the following is not part of management's report on internal controls?

One of the advantages of a computerized accounting system is that the computerized system eliminates the need for internal controls.

Which of the following is not true of internal control as defined by COSO?

The better the quality of the internal controls,the more an auditor can rely on the controls.

Even if auditors believe internal controls are ineffective,they must still collect some evidence to conclude they are ineffective.

Which of the following is an example of a test of controls?

Effective control not only identifies risk but also responds to these risks appropriately.

Which of the following is an example of a physical control to safeguard assets?