Question 1

One control benefit of an IT system is that it ________.

Accepted Answer

A) is efficient at processing large,unusual,or non-recurring transactions 
B) can monitor the effectiveness of automated controls 
C) adjusts rapidly to changing business processes 
D) reduces the risk of controls being overridden 
A) is efficient at processing large,unusual,or non-recurring transactions 
B) can monitor the effectiveness of automated controls 
C) adjusts rapidly to changing business processes 
D) reduces the risk of controls being overridden D

Question 2

Internal controls are put in place to keep the company on course toward achieving its goals.

Accepted Answer

A) True 
 B)False  True

Question 3

For audits of financial institutions,auditors have a well-being reporting requirement.List four matters that must be reported under federal institutions legislation.

Accepted Answer

Examples of reportable conditions include any four of the following:
i.Significant weaknesses in internal control.
ii.Going concern uncertainties that require disclosure or change in accounting basis.
iii.Reservations in the audit opinion.
iv.Indicators of a lack of good faith by management.
v.Contraventions of legislated capital requirements.

Question 4

An auditor does not need to test ________.

Accepted Answer

A) control strengths because they are known to be strengths 
B) control weaknesses because they are known to be weak 
C) control strengths because they offset weaknesses 
D) control weaknesses because they are offset by strengths 
A) control strengths because they are known to be strengths 
B) control weaknesses because they are known to be weak 
C) control strengths because they offset weaknesses 
D) control weaknesses because they are offset by strengths

Question 5

What internal control objective is affected by cut off errors? Why are they of such concern to auditors?

Accepted Answer

The control objective of proper period r

Question 6

Which of the following statements is true?

Accepted Answer

A) Testing of controls is the most cost-efficient way of designing each audit. 
B) Substantive testing is the most cost-efficient way of designing each audit. 
C) As the work of testing of controls increases,the cost of substantive work increases. 
D) There is a point where further testing of controls becomes more expensive than performing substantive tests. 
A) Testing of controls is the most cost-efficient way of designing each audit. 
B) Substantive testing is the most cost-efficient way of designing each audit. 
C) As the work of testing of controls increases,the cost of substantive work increases. 
D) There is a point where further testing of controls becomes more expensive than performing substantive tests.

Question 7

If there have been no changes to a control that a previous audit has found to be working effectively,________.

Accepted Answer

A) an auditor must still test the controls and not place reliance on the prior year's testing 
B) an auditor must still test the controls but not to the same extent as the prior year's testing 
C) an auditor can rely on the prior year's work and not test controls in the current year 
D) an auditor can rely on the prior year's work but should test the controls every few years 
A) an auditor must still test the controls and not place reliance on the prior year's testing 
B) an auditor must still test the controls but not to the same extent as the prior year's testing 
C) an auditor can rely on the prior year's work and not test controls in the current year 
D) an auditor can rely on the prior year's work but should test the controls every few years

Question 8

One of the auditor's primary concerns with regard to internal controls is ________.

Accepted Answer

A) the degree to which the internal controls are working as designed 
B) the possibility of an inherent risk that has to be controlled 
C) the impact the controls have on the accuracy of the accounting records 
D) the amount of substantive work to be saved by testing controls instead 
A) the degree to which the internal controls are working as designed 
B) the possibility of an inherent risk that has to be controlled 
C) the impact the controls have on the accuracy of the accounting records 
D) the amount of substantive work to be saved by testing controls instead

Question 9

Control tests and substantive tests of balances are easily distinguishable.

Accepted Answer

A) True 
 B)False

Question 10

Validity refers to ________.

Accepted Answer

A) ensuring that transactions are not omitted from accounting records 
B) ensuring that recorded transactions should have been recorded 
C) ensuring that all recorded transactions have been approved before recording 
D) ensuring that all recorded transactions have been recorded at the right dollar amount 
A) ensuring that transactions are not omitted from accounting records 
B) ensuring that recorded transactions should have been recorded 
C) ensuring that all recorded transactions have been approved before recording 
D) ensuring that all recorded transactions have been recorded at the right dollar amount

Question 11

Control activities are often designed to speed processing of transactions.

Accepted Answer

A) True 
 B)False

Question 12

The objective of control procedures is to process transactions correctly.

Accepted Answer

A) True 
 B)False

Question 13

Classification refers to ensuring that the accounting for transactions is in the period they occur.

Accepted Answer

A) True 
 B)False

Question 14

An advantage of using a pre-printed audit questionnaire is that the auditor is less likely to forget to ask some important question.

Accepted Answer

A) True 
 B)False

Question 15

Below are the seven internal control objectives.
A)Validity
B)Completeness
C)Authorization
D)Accuracy
E)Classification
F)Accounting and posting
G)Proper period HYPERLINK ""
For each of the following control procedures,identify the internal control objective that applies and place the correct letter in the space provided.
____ 1.Match shipping documents to sales invoices before recording the transaction in the sales journal.
____ 2.Reconcile the accounts receivable subsidiary ledger to the general ledger control account.
____ 3.The sales manager must approve any discounts taken after the discount period.
____ 4.Compare the quantity shipped per the shipping documents to the quantity billed per the sales invoice,check prices to approved price lists,and recalculate extensions and totals before the recording the sale.
____ 5.Account for numerical sequence of pre-numbered shipping documents.

Accepted Answer

The answer of Below are the seven internal control objectives.
A)Validity
B)Completeness
C)Authorization
D)Accuracy
E)Classification
F)Accounting...

Question 16

Which of the following is true regarding the financial assertions?

Accepted Answer

A) All assertions can be proved using only substantive procedures,but it would be too costly. 
B) Some assertions are virtually impossible to prove without some evaluation of control effectiveness. 
C) Some assertions can be proved using only an evaluation of control effectiveness. 
D) The evaluation of control effectiveness is only used because it is more efficient than using only substantive procedures. 
A) All assertions can be proved using only substantive procedures,but it would be too costly. 
B) Some assertions are virtually impossible to prove without some evaluation of control effectiveness. 
C) Some assertions can be proved using only an evaluation of control effectiveness. 
D) The evaluation of control effectiveness is only used because it is more efficient than using only substantive procedures.

Question 17

The auditor's control risk assessment will affect the procedures to be included in the audit.

Accepted Answer

A) True 
 B)False

Question 18

An auditor has uncovered suspicious expense reimbursements paid to the chief executive officer of its audit client.What should the auditor do?

Accepted Answer

A) Discuss the matter with the chief executive officer. 
B) Report the matter in writing to the chief financial officer. 
C) Report the matter in writing to the audit committee. 
D) Report the matter in writing to the federal government. 
A) Discuss the matter with the chief executive officer. 
B) Report the matter in writing to the chief financial officer. 
C) Report the matter in writing to the audit committee. 
D) Report the matter in writing to the federal government.

Question 19

List and give some examples of five security components of a well-designed IT system.

Accepted Answer

i.Network security refers to network seg

Question 20

At the planning stage,the auditor's goal is to ________.

Accepted Answer

A) select the most effective set of evidence-gathering techniques 
B) maximize audit fees 
C) select the most cost-effective set of evidence-gathering techniques 
D) minimize field work at remote locations 
A) select the most effective set of evidence-gathering techniques 
B) maximize audit fees 
C) select the most cost-effective set of evidence-gathering techniques 
D) minimize field work at remote locations

One control benefit of an IT system is that it ________.

Internal controls are put in place to keep the company on course toward achieving its goals.

For audits of financial institutions,auditors have a well-being reporting requirement.List four matters that must be reported under federal institutions legislation.

An auditor does not need to test ________.

What internal control objective is affected by cut off errors? Why are they of such concern to auditors?

Which of the following statements is true?

If there have been no changes to a control that a previous audit has found to be working effectively,________.

One of the auditor's primary concerns with regard to internal controls is ________.

Control tests and substantive tests of balances are easily distinguishable.

Validity refers to ________.

Control activities are often designed to speed processing of transactions.

The objective of control procedures is to process transactions correctly.

Classification refers to ensuring that the accounting for transactions is in the period they occur.

An advantage of using a pre-printed audit questionnaire is that the auditor is less likely to forget to ask some important question.

Which of the following is true regarding the financial assertions?

The auditor's control risk assessment will affect the procedures to be included in the audit.

An auditor has uncovered suspicious expense reimbursements paid to the chief executive officer of its audit client.What should the auditor do?

List and give some examples of five security components of a well-designed IT system.

At the planning stage,the auditor's goal is to ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters

Exam 9: Control Assessment and Testing

One control benefit of an IT system is that it ________.

Internal controls are put in place to keep the company on course toward achieving its goals.

For audits of financial institutions,auditors have a well-being reporting requirement.List four matters that must be reported under federal institutions legislation.

An auditor does not need to test ________.

What internal control objective is affected by cut off errors? Why are they of such concern to auditors?

Which of the following statements is true?

If there have been no changes to a control that a previous audit has found to be working effectively,________.

One of the auditor's primary concerns with regard to internal controls is ________.

Control tests and substantive tests of balances are easily distinguishable.

Validity refers to ________.

Control activities are often designed to speed processing of transactions.

The objective of control procedures is to process transactions correctly.

Classification refers to ensuring that the accounting for transactions is in the period they occur.

An advantage of using a pre-printed audit questionnaire is that the auditor is less likely to forget to ask some important question.

Which of the following is true regarding the financial assertions?

The auditor's control risk assessment will affect the procedures to be included in the audit.

An auditor has uncovered suspicious expense reimbursements paid to the chief executive officer of its audit client.What should the auditor do?

List and give some examples of five security components of a well-designed IT system.

At the planning stage,the auditor's goal is to ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters