Question 1

Segregation of duties is an example of an internal control procedure.

Accepted Answer

A) True 
 B)False

Question 2

The Sarbanes-Oxley Act contains many sections.Which sections are the focus of this chapter?

Accepted Answer

The chapter concentrates on in

Question 3

While the Sarbanes-Oxley Act prohibits auditors from providing non-accounting services to their audit clients,they are not prohibited from performing such services for non-audit clients or privately held companies.

Accepted Answer

A) True 
 B)False

Question 4

Internal control in a computerized environment can be divided into two broad categories.What are they? Explain each.

Accepted Answer

Internal controls can be divided into tw

Question 5

Corporate management (including the CEO)must certify monthly and annually their organization's internal controls over financial reporting.

Accepted Answer

A) True 
 B)False

Question 6

An IT auditor expresses an opinion on the fairness of the financial statements.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT an implication of section 302 of the Sarbanes-Oxley Act?

Accepted Answer

A)  Auditors must determine, whether changes in internal control has, or is likely to, materially affect internal control over financial reporting. 
B)  Auditors must interview management regarding significant changes in the design or operation of internal control that occurred since the last audit. 
C)  Corporate management (including the CEO) must certify monthly and annually their organization's internal controls over financial reporting. 
D)  Management must disclose any material changes in the company's internal controls that have occurred during the most recent fiscal quarter. 
A)  Auditors must determine, whether changes in internal control has, or is likely to, materially affect internal control over financial reporting. 
B)  Auditors must interview management regarding significant changes in the design or operation of internal control that occurred since the last audit. 
C)  Corporate management (including the CEO) must certify monthly and annually their organization's internal controls over financial reporting. 
D)  Management must disclose any material changes in the company's internal controls that have occurred during the most recent fiscal quarter.

Question 8

A strong internal control system will reduce the amount of substantive testing that must be performed.

Accepted Answer

A) True 
 B)False

Question 9

Tests of controls include

Accepted Answer

A)  confirming accounts receivable 
B)  counting inventory 
C)  completing questionnaires 
D)  counting cash 
A)  confirming accounts receivable 
B)  counting inventory 
C)  completing questionnaires 
D)  counting cash

Question 10

In this age of high technology and computer based information systems,why are accountants concerned about physical (human)controls?

Accepted Answer

Virtually all systems,regardless of thei

Question 11

The same internal control objectives apply to manual and computer-based information systems.

Accepted Answer

A) True 
 B)False

Question 12

Explain the purpose of the PCAOB

Accepted Answer

The PCAOB is empowered to set

Question 13

Control risk is

Accepted Answer

A)  the probability that the auditor will render an unqualified opinion on financial statements that are materially misstated 
B)  associated with the unique characteristics of the business or industry of the client 
C)  the likelihood that the control structure is flawed because controls are either absent or inadequate to prevent or detect errors in the accounts 
D)  the risk that auditors are willing to take that errors not detected or prevented by the control structure will also not be detected by the auditor 
A)  the probability that the auditor will render an unqualified opinion on financial statements that are materially misstated 
B)  associated with the unique characteristics of the business or industry of the client 
C)  the likelihood that the control structure is flawed because controls are either absent or inadequate to prevent or detect errors in the accounts 
D)  the risk that auditors are willing to take that errors not detected or prevented by the control structure will also not be detected by the auditor

Question 14

Why is an Independent Audit Committee important to a company?

Accepted Answer

The Sarbanes-Oxley Act requires all audi

Question 15

Use the internal control procedures listed below to complete statements 6 through 12.
  
-Approving a price reduction because goods are damaged is an example of __________________________.

Accepted Answer

specific a

Question 16

Use the internal control procedures listed below to complete statements 6 through 12.
  
-Sequentially numbering all sales invoices is an example of __________________________.

Accepted Answer

The answer of Use the internal control procedures listed below...

Question 17

Which of the following is the best reason to separate duties in a manual system?

Accepted Answer

A)  to avoid collusion between the programmer and the computer operator 
B)  to ensure that supervision is not required 
C)  to prevent the record keeper from authorizing transactions 
D)  to enable the firm to function more efficiently 
A)  to avoid collusion between the programmer and the computer operator 
B)  to ensure that supervision is not required 
C)  to prevent the record keeper from authorizing transactions 
D)  to enable the firm to function more efficiently

Question 18

A qualified opinion on management's assessment of internal controls over the financial reporting system necessitates a qualified opinion on the financial statements?

Accepted Answer

A) True 
 B)False

Question 19

What are the five internal control components described in the COSO framework

Accepted Answer

the control environment,risk a

Question 20

The bank reconciliation uncovered a transposition error in the books.This is an example of a

Accepted Answer

A)  preventive control 
B)  detective control 
C)  corrective control 
D)  none of the above 
A)  preventive control 
B)  detective control 
C)  corrective control 
D)  none of the above

Segregation of duties is an example of an internal control procedure.

The Sarbanes-Oxley Act contains many sections.Which sections are the focus of this chapter?

While the Sarbanes-Oxley Act prohibits auditors from providing non-accounting services to their audit clients,they are not prohibited from performing such services for non-audit clients or privately held companies.

Internal control in a computerized environment can be divided into two broad categories.What are they? Explain each.

Corporate management (including the CEO)must certify monthly and annually their organization's internal controls over financial reporting.

An IT auditor expresses an opinion on the fairness of the financial statements.

Which of the following is NOT an implication of section 302 of the Sarbanes-Oxley Act?

A strong internal control system will reduce the amount of substantive testing that must be performed.

Tests of controls include

In this age of high technology and computer based information systems,why are accountants concerned about physical (human)controls?

The same internal control objectives apply to manual and computer-based information systems.

Explain the purpose of the PCAOB

Control risk is

Why is an Independent Audit Committee important to a company?

Use the internal control procedures listed below to complete statements 6 through 12. -Approving a price reduction because goods are damaged is an example of __________________________.

Use the internal control procedures listed below to complete statements 6 through 12. -Sequentially numbering all sales invoices is an example of __________________________.

Which of the following is the best reason to separate duties in a manual system?

A qualified opinion on management's assessment of internal controls over the financial reporting system necessitates a qualified opinion on the financial statements?

What are the five internal control components described in the COSO framework

The bank reconciliation uncovered a transposition error in the books.This is an example of a

Auditing IT Governance Controls

Security Part I: Auditing Operating Systems and Networks

IT Security Part II: Auditing Database Systems

Systems Development and Program Change Activities

Overview of Transaction Processing and Financial Reporting Systems

Computer-Assisted Audit Tools and Techniques

Data Structures and CAATTs for Data Extraction

Auditing the Revenue Cycle

Auditing the Expenditure Cycle

Business Ethics, Fraud, and Fraud Detection

Enterprise Resource Planning Systems

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Exam 1: Auditing and Internal Control

Segregation of duties is an example of an internal control procedure.

The Sarbanes-Oxley Act contains many sections.Which sections are the focus of this chapter?

While the Sarbanes-Oxley Act prohibits auditors from providing non-accounting services to their audit clients,they are not prohibited from performing such services for non-audit clients or privately held companies.

Internal control in a computerized environment can be divided into two broad categories.What are they? Explain each.

Corporate management (including the CEO)must certify monthly and annually their organization's internal controls over financial reporting.

An IT auditor expresses an opinion on the fairness of the financial statements.

Which of the following is NOT an implication of section 302 of the Sarbanes-Oxley Act?

A strong internal control system will reduce the amount of substantive testing that must be performed.

Tests of controls include

In this age of high technology and computer based information systems,why are accountants concerned about physical (human)controls?

The same internal control objectives apply to manual and computer-based information systems.

Explain the purpose of the PCAOB

Control risk is

Why is an Independent Audit Committee important to a company?

Use the internal control procedures listed below to complete statements 6 through 12. -Approving a price reduction because goods are damaged is an example of __________________________.

Use the internal control procedures listed below to complete statements 6 through 12. -Sequentially numbering all sales invoices is an example of __________________________.

Which of the following is the best reason to separate duties in a manual system?

A qualified opinion on management's assessment of internal controls over the financial reporting system necessitates a qualified opinion on the financial statements?

What are the five internal control components described in the COSO framework

The bank reconciliation uncovered a transposition error in the books.This is an example of a

Auditing IT Governance Controls

Security Part I: Auditing Operating Systems and Networks

IT Security Part II: Auditing Database Systems

Systems Development and Program Change Activities

Overview of Transaction Processing and Financial Reporting Systems

Computer-Assisted Audit Tools and Techniques

Data Structures and CAATTs for Data Extraction

Auditing the Revenue Cycle

Auditing the Expenditure Cycle

Business Ethics, Fraud, and Fraud Detection

Enterprise Resource Planning Systems

Filters