Exam 6: Internal Control in a Financial Statement Audit

In planning an audit of a new client,an auditor most likely would consider the methods used to process accounting information because such methods

Which of the following statements concerning control risk is correct?

While substantive procedures may support the accuracy of underlying records,these tests frequently provide no affirmative evidence of segregation of duties because

Assessing control risk at below the maximum most likely would involve

In an audit of financial statements of a private company in accordance with generally accepted auditing standards,an auditor is required to

What are four potential tools available to the auditor for documenting their understanding of a client's system of internal control?

All of the following are significant deficiencies except:

In a properly designed internal control system,the same employee may be permitted to

General controls include all of the following except:

Internal control consists of six components.

Management's attitude toward aggressive financial reporting and its emphasis on meeting projected profit goals most likely would significantly influence an entity's control environment when

An auditor's primary consideration regarding an entity's internal controls is whether the policies and procedures

Which of the following input controls is a numeric value computed to provide assurance that the original value has not been altered in construction or transmission?

Where computer processing is used in significant accounting applications,internal control activities may be defined by classifying control activities into two types: general and

Which of the following procedures most likely would provide an auditor with evidence about whether an entity's internal control is suitably designed to prevent or detect material misstatements?

Audit evidence concerning proper segregation of duties ordinarily is best obtained by

In terms of an audit,define substantive strategy and reliance strategy.Include in your definition how the different strategies relate to internal control.Which strategy would best relate to a lower control risk?

The control environment component of internal controls includes all of the following except:

A procedure that would most likely be used by an auditor in performing tests of control activities that involve segregation of functions and that leave no transaction trail is

Effective internal control in a small company that has an insufficient number of employees to permit proper division of responsibilities can best be enhanced by