Exam 6: Internal Control in a Financial Statement Audit

Based on a study and evaluation completed at an interim date,the auditor concludes that no significant internal control weaknesses exist.The records and procedures would most likely be tested again at year-end if

When communicating internal control-related matters noted in an audit of a nonpublic company,an auditor's report issued on significant deficiencies should indicate that

The extent of an entity's use of IT can affect any of the components of internal control.

An entity's control activities include all of the following except:

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

While performing an audit on the internal controls over financial reporting for AirWaves Corporation,your audit team finds what it considers to be a significant deficiency.AirWaves is a large,private company.What steps would you take to communicate this finding?

What are two potential benefits and two potential risks of using IT for an entity's internal control?

As opposed to a manual control,an automated control

If auditors conduct substantive procedures as of 10/31 for an entity with a 12/31 year-end

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

An organizational structure is important for all of the following reasons except:

The independent auditor selects several transactions in each functional area and traces them through the entire system,paying special attention to evidence about whether or not the control activities are in operation.This is an example of a(n)

The auditor should consider all of the following when deciding whether substantive procedures will be performed at an interim date except:

Before applying substantive procedures to the details of asset and liability accounts at an interim date,the auditor should

Which of the following statements concerning control risk is correct?

Assessing control risk at a lower level most likely would involve

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

Why might an auditor decide to test controls at an interim date?

Describe the limitations of internal control.Why do limitations on internal control exist?

All of the following are significant deficiencies except: