Exam 10: Section 404 Audits of Internal Control and Control Risk

To obtain an understanding of an entity's control environment, an auditor should concentrate on the substance of management's policies and procedures rather than their form because:

In performing the audit of internal control over financial reporting the auditor emphasizes internal control over class of transactions because:

To issue a report on internal control over financial reporting for a public company, an auditor must:

Which of the following parties provides an assessment of the effectiveness of internal control over financial reporting for public companies?

The employee in charge of authorizing credit to the company's customers does not fully understand the concept of credit risk. This lack of knowledge would constitute:

Significant deficiencies and material weaknesses in internal control of a public company must be reported in writing to which of the following?

Significant deficiencies need to be communicated to the company's audit committee because:

To determine if significant internal control deficiencies are material weaknesses, they must be evaluated on their:

The PCAOB places responsibility for the reliability of internal controls over the financial reporting process to:

Internal controls are not designed to provide reasonable assurance that:

Procedures used to obtain an understanding of internal control are normally performed on fewer transactions than procedures used to test controls.

The purpose of phase 3 in the "process for understanding internal control and assessing control risk" is to:

Which of the following components of the control environment define the existing lines of responsibility and authority?

When planning an audit, the auditor's assessed level of control risk is:

Which of the following deal with ongoing or periodic assessment of the quality of internal control by management?

Two key concepts that underlie management's design and implementation of internal control are:

After considering a client's internal controls, an auditor has concluded that it is well designed and is functioning as intended. Under these circumstances the auditor would most likely:

Once auditors determine that entity level controls are designed and placed in the operation they:

In the audit of a private company, the auditor will test internal controls when control risk is initially assessed at:

The financial statements may not correctly reflect accounting frameworks such as AAP or IFRS if the: