Exam 18: Auditing and Evaluating the Ais

In ___, auditors examine a company's rules and procedures for conducting business.

Joe was a recent graduate of Big State University's accounting program.He was assigned to an audit team managed by Pam, a licensed CPA.Based on those two statements alone, which of the following is most true?

A systems flowchart could be helpful in fulfilling which generally accepted auditing standards?

A clear understanding of the steps in the accounting cycle is likely to be useful in:

An auditor is concerned that her company's purchasing process is not functioning as efficiently as possible.Which type of audit will best address her concern?

An investigative auditor wanted to assess employees' motivation for committing fraud.Which of the following tools will be most beneficial to the auditor in that task?

Critical thinking is important in:

Information technology skills can link auditing to accounting information systems.Which of the following tasks can be completed using only information technology?

As an input to the accounting information system, a properly completed sales invoice can help an auditor with which of the following financial statement assertions?

Which of the following violates the generally accepted auditing standard indicated?

Each numbered item below indicates one action an auditor might take as part of a financial statement audit.Which of the two lettered alternatives would be the immediate next step based on the five generic financial statement audit steps presented in the text? 1) Ask employees about the ethical tone management sets in the organization. a.Prepare a risk/control matrix. b.Examine the CEO's resume.2) Discuss the educational background of each member of the upper management team. a.Outline the client's risk exposures. b.Verify balances in accounts receivable.3) Determine if adequate separation of duties exists. a.Prepare a systems flowchart of the sales/collection process. b.Compute depreciation on plant assets.4) Choose transactions to verify as part of the audit. a.Question management about their knowledge of COSO models. b.Issue an audit report.5) Examine a systems flowchart to determine who reconciles the bank statement. a.Verify that business processes are adequately documented. b.Reconcile the latest bank statement.

Consider the statements below as you answer the question: • The chief financial officer of TNL Corporation is a certified public accountant.• OBP Corporation's internal audit manager is a certified fraud examiner.• CPQ Corporation maintains a set of systems flowcharts that describe current business processes.• DKM Corporation encrypts all data transmitted over its wireless network.Which statements relate to the third generic step in a financial statement audit?

Understanding business processes can link auditing to accounting information systems.Which of the following can facilitate an understanding of business processes?

Generally accepted auditing standards are divided into three groups.Which of the following is a standard in the "reporting" group?