Question 1

The payroll department should be responsible for signing payroll checks.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following activities would be an example of an ongoing evaluation?

Accepted Answer

A) Automated review of all payment transactions. 
B) Monthly bank statement reconciliations. 
C) Periodic review of employee expense reimbursements. 
D) All of the above. 
A) Automated review of all payment transactions. 
B) Monthly bank statement reconciliations. 
C) Periodic review of employee expense reimbursements. 
D) All of the above.

Question 3

Self-checking digit algorithms have been developed to test for transposition errors associated with identification numbers.

Accepted Answer

A) True 
 B)False

Question 4

Internal controls may be preventive or detective.Which of the following controls is preventive?

Accepted Answer

A) Requiring two persons to open mail containing payments. 
B) Reconciling the accounts receivable subsidiary file with the control account. 
C) Using batch totals. 
D) Preparing bank reconciliations. 
A) Requiring two persons to open mail containing payments. 
B) Reconciling the accounts receivable subsidiary file with the control account. 
C) Using batch totals. 
D) Preparing bank reconciliations.

Question 5

Effective monitoring of internal controls not only identifies risks but also responds to these risks appropriately.

Accepted Answer

A) True 
 B)False

Question 6

Internal control Define the term "internal control" and identify the major components of an internal control system.

Accepted Answer

Internal control is a process,effected b

Question 7

The COSO principle that an organization should identify and assess changes that significantly impact the system of internal control is related to which COSO component?

Accepted Answer

A) Control environment 
B) Risk assessment 
C) Control activities 
D) Monitoring 
A) Control environment 
B) Risk assessment 
C) Control activities 
D) Monitoring

Question 8

Which of the following is not part of the control environment of an organization?

Accepted Answer

A) Management's philosophy and operating style. 
B) Organizational structure. 
C) Organization's commitment to ethical values. 
D) All of the above are part of the control environment. 
A) Management's philosophy and operating style. 
B) Organizational structure. 
C) Organization's commitment to ethical values. 
D) All of the above are part of the control environment.

Question 9

An organization's risk assessment process should be performed only by senior-level management.

Accepted Answer

A) True 
 B)False

Question 10

Relationship of the five internal control components
The five components of the COSO internal control system are conceptually and logically integrated.List the five components of the model and describe how they are integrated with each other in the internal

Accepted Answer

1. Control environment
The component of

Question 11

Internal Control Principles Identify and briefly describe the two principles that should govern the monitoring function.

Accepted Answer

1. The organization selects, develops, a

Question 12

Entity-Wide and Transaction Controls
Distinguish between entity-wide controls and transaction controls. Provide at least three examples of each type.
Entity-wide controls operate across an entity and affect multiple processes,
transactions, accounts, and assertions. Some examples of entity-wide controls include:
Controls related to the control environment
Controls over management override
The organization’s risk assessment process
Centralized processing and controls
Controls to monitor results of operations
Controls to monitor other controls
Controls over the period-end financial reporting process
Policies that address significant business control and risk management practices

Accepted Answer

Transaction controls typically affect on

Question 13

Controls to monitor results of operations are considered to be transaction controls.

Accepted Answer

A) True 
 B)False

Question 14

All organizations should evaluate and communicate internal control deficiencies in a timely manner to those parties responsible for taking corrective action,including senior management and the board of directors,as appropriate.

Accepted Answer

A) True 
 B)False

Question 15

An organization's control environment is established and maintained by the internal auditing department.

Accepted Answer

A) True 
 B)False

Question 16

Physical controls to safeguard assets are not intended to include simple controls such as fences and locks.

Accepted Answer

A) True 
 B)False

Question 17

In a financial statement audit,what is the external auditor's primary concern?

Accepted Answer

A) Detecting all errors. 
B) Determining the effectiveness of operations. 
C) Determining whether the internal controls are effective. 
D) Determining whether the internal controls promote efficiency. 
A) Detecting all errors. 
B) Determining the effectiveness of operations. 
C) Determining whether the internal controls are effective. 
D) Determining whether the internal controls promote efficiency.

Question 18

Which of the following services does the PCAOB require auditors of public companies to perform?

Accepted Answer

A) A financial statement audit and an attest audit. 
B) A financial statement audit and an assurance audit. 
C) A financial statement audit and agreed upon procedures. 
D) A financial statement audit and an examination of the effectiveness of internal controls. 
A) A financial statement audit and an attest audit. 
B) A financial statement audit and an assurance audit. 
C) A financial statement audit and agreed upon procedures. 
D) A financial statement audit and an examination of the effectiveness of internal controls.

Question 19

Walkthroughs and inquiries are often used to obtain an understanding of internal controls.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is an example of a physical control to safeguard assets?

Accepted Answer

A) Hiring only trustworthy cashiers. 
B) Separation of duties. 
C) Locks on the warehouse doors. 
D) Safety audits on the production line. 
A) Hiring only trustworthy cashiers. 
B) Separation of duties. 
C) Locks on the warehouse doors. 
D) Safety audits on the production line.

The payroll department should be responsible for signing payroll checks.

Which of the following activities would be an example of an ongoing evaluation?

Self-checking digit algorithms have been developed to test for transposition errors associated with identification numbers.

Internal controls may be preventive or detective.Which of the following controls is preventive?

Effective monitoring of internal controls not only identifies risks but also responds to these risks appropriately.

Internal control Define the term "internal control" and identify the major components of an internal control system.

The COSO principle that an organization should identify and assess changes that significantly impact the system of internal control is related to which COSO component?

Which of the following is not part of the control environment of an organization?

An organization's risk assessment process should be performed only by senior-level management.

Relationship of the five internal control components The five components of the COSO internal control system are conceptually and logically integrated.List the five components of the model and describe how they are integrated with each other in the internal

Internal Control Principles Identify and briefly describe the two principles that should govern the monitoring function.

Controls to monitor results of operations are considered to be transaction controls.

All organizations should evaluate and communicate internal control deficiencies in a timely manner to those parties responsible for taking corrective action,including senior management and the board of directors,as appropriate.

An organization's control environment is established and maintained by the internal auditing department.

Physical controls to safeguard assets are not intended to include simple controls such as fences and locks.

In a financial statement audit,what is the external auditor's primary concern?

Which of the following services does the PCAOB require auditors of public companies to perform?

Walkthroughs and inquiries are often used to obtain an understanding of internal controls.

Which of the following is an example of a physical control to safeguard assets?

Quality Auditing: Why It Matters

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Professional Legal Liability

Professional Auditing Standards and the Audit Opinion Formulation Process

Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

Filters

Exam 3: Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditor

The payroll department should be responsible for signing payroll checks.

Which of the following activities would be an example of an ongoing evaluation?

Self-checking digit algorithms have been developed to test for transposition errors associated with identification numbers.

Internal controls may be preventive or detective.Which of the following controls is preventive?

Effective monitoring of internal controls not only identifies risks but also responds to these risks appropriately.

Internal control Define the term "internal control" and identify the major components of an internal control system.

The COSO principle that an organization should identify and assess changes that significantly impact the system of internal control is related to which COSO component?

Which of the following is not part of the control environment of an organization?

An organization's risk assessment process should be performed only by senior-level management.

Relationship of the five internal control components The five components of the COSO internal control system are conceptually and logically integrated.List the five components of the model and describe how they are integrated with each other in the internal

Internal Control Principles Identify and briefly describe the two principles that should govern the monitoring function.

Controls to monitor results of operations are considered to be transaction controls.

All organizations should evaluate and communicate internal control deficiencies in a timely manner to those parties responsible for taking corrective action,including senior management and the board of directors,as appropriate.

An organization's control environment is established and maintained by the internal auditing department.

Physical controls to safeguard assets are not intended to include simple controls such as fences and locks.

In a financial statement audit,what is the external auditor's primary concern?

Which of the following services does the PCAOB require auditors of public companies to perform?

Walkthroughs and inquiries are often used to obtain an understanding of internal controls.

Which of the following is an example of a physical control to safeguard assets?

Quality Auditing: Why It Matters

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Professional Legal Liability

Professional Auditing Standards and the Audit Opinion Formulation Process

Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Long-Term Liabilities and Stockholders Equity Transactions

Completing a Quality Audit

Audit Reports

Filters