Exam 10: Internal Control, Control Risk, and Section 404 Audits

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Define the following terms: control deficiency, significant deficiency, and material weakness.

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Section 404 of the Sarbanes-Oxley Act requires that public companies issue an internal control report.

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In evaluating the operational effectiveness of internal controls the auditor is likely to use four types of audit procedures.List the procedures below.

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Reasonable assurance allows for:

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Control activities help assure that the necessary actions are taken to address risks to the achievement of the company's objectives.List the five types of control activities.

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Once auditors determine that entity level controls are designed and placed in the operation they:

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Before making the final assessment of internal control at the end of an integrated audit, the auditor must:

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Which of the following statements is most correct with respect to separation of duties?

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The Sarbanes-Oxley Act requires:

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Which of management's assertions with respect to implementing internal controls is the auditor primarily concerned?

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The text suggested a five-step approach to identify deficiencies, significant deficiencies, and material weaknesses.Describe this approach.

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A control available in a small company, which may be necessitated because of lack of competent personnel, is:

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To issue an unqualified opinion on internal control over financial reporting, there must be no identified material weaknesses and no restrictions on the scope of the audit.

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The assessment of control risk is the measure of the auditor's expectation that internal controls will prevent material misstatements from occurring or detect and correct them if they have occurred.

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When assessing control risk:

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Which of the following is the correct definition of "control deficiency"?

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