Exam 7: Understanding and Testing the Clients System of Internal Controls

Benny Pecarve is planning to visit an airline company to review the collective assessment of the client's control environment, risk assessment process, information system, control activitiand monitoring of controls. What dothis mandate describe?

The generally accepted objectivof internal control do not include:

Internal control encompasswhich of the following elements of an organization?

Which of the following statements about internal control is incorrect?

The purpose of an auditor's management letter is to inform the client of the auditor's recommendations for improving its internal controls.

Lucia Dottore, an audit senior, performed a review of certain application controls at a clothing manufacturing client. Which one of these controls is an input control?

The internal control objective of 'valued' refers to controls in place to ensure thattransactions are recorded in the correct accounting period.

Internal control is intended to provide reasonable assurance about the achievement of an entity's objectives.

Internal controls in large and medium sized entitican only provide an entity with reasonable assurance in achieving its financial reporting objectives. Which of the following is not an inherent limitation of internal control?

The most common ways of auditors documenting their understanding of internal controls include:

Which of the following statements is correct?

Ben Simon wants to ensure that salin a retail outlet are not recorded at the wrong amount. Which preventive control will help him ensure his objective?

Internal control weaknessdecrease the risk of material misstatements being undetected by management's processand controls.

The senior auditor has no physical evidence that a control was performed, who performed it, or how effectively it was performed. What is the nature of this control?

Stanley Morgan has learned that it is important to be aware of the attitude and actions of management and those charged with governance concerning the entity's internal control and its importance in the entity. This best describdealing with

The factors to consider when deciding the extent of testing of controls include which of the following?

One of the elements of an entity's control environment is management's philosophy and operating style.

When gaining an understanding of the client's monitoring processat the entity level, factors ordinarily considered include:

The auditor had the following procedurin his audit program for a client: (i) Review performance versus forecasts (ii) Review performance indicators (iii) Review exception reports What are these instructions related to?

For identified risks, management: