Question 1

Management's report on internal controls must include each of the following except

Accepted Answer

A)  a statement that management is responsible for establishing and maintaining adequate internal control over financial reporting.
B)  a statement identifying the framework management uses to evaluate the effectiveness of the company's internal control.
C)  a statement providing management's assessment of the effectiveness of the company's internal control.
D)  a statement providing management's evaluation of the company's control environment.E) All of the above
F) B) and D)

Question 2

Which of the following statements is correct regarding internal control?

Accepted Answer

A)  A well-designed internal control environment ensures the achievement of an entity's control objectives.
B)  An inherent limitation to internal control is the fact that controls can be circumvented by management override.
C)  A well-designed and operated internal control environment should detect collusion perpetrated by two people.
D)  Internal control is a necessary business function and should be designed and operated to detect all errors and fraud.E) C) and D)
F) A) and C)

Question 3

What is the difference between an internal control's design effectiveness and its operating effectiveness?

Accepted Answer

Design effectiveness determines whether ...

Question 4

The "obtaining an understanding" work phase (Phase 1) of internal control evaluation would not give auditors an overall acquaintance with the client's

Accepted Answer

A)  control environment.
B)  information and communication system.
C)  control activity effectiveness.
D)  monitoring activities.E) A) and D)
F) All of the above

Question 5

An auditor is evaluating a client's internal controls.Which of the following situations would be the most difficult internal control issue for an auditor to detect?

Accepted Answer

A)  The accounting staff neglects the control,due to increased transactions to be processed.
B)  The technology department writes a program that does not properly implement the control,due to a lack of understanding.
C)  Two employees,who work in different departments,are circumventing an internal control.
D)  Someone erroneously disables edit checks in a software program designed to identify control exceptions.E) A) and B)
F) All of the above

Question 6

The primary objective of procedures performed to obtain an understanding of the entity's internal control is to provide an auditor with

Accepted Answer

A)  knowledge necessary for audit planning.
B)  evidential matter to use in assessing inherent risk.
C)  a basis for modifying tests of controls.
D)  an evaluation of the consistency of application of management's policies.E) A) and B)
F) A) and C)

Question 7

After obtaining an understanding of a client's financial reporting control activities,the auditor would next

Accepted Answer

A)  test the client's control activities.
B)  assess the final control risk.
C)  document the understanding obtained.
D)  plan the remainder of the audit work.E) None of the above
F) A) and D)

Exam 5: Risk Assessment: Internal Control Evaluation

Management's report on internal controls must include each of the following except

Correct Answer
verified

The primary objective of procedures performed to obtain an understanding of the entity's internal control is to provide an auditor with

Correct Answer
verified

The "obtaining an understanding" work phase (Phase 1) of internal control evaluation would not give auditors an overall acquaintance with the client's

Correct Answer
verified

Which of the following statements is correct regarding internal control?

Correct Answer
verified

An auditor is evaluating a client's internal controls.Which of the following situations would be the most difficult internal control issue for an auditor to detect?

Correct Answer
verified

After obtaining an understanding of a client's financial reporting control activities,the auditor would next

Correct Answer
verified

What is the difference between an internal control's design effectiveness and its operating effectiveness?

Correct Answer
verified
Design effectiveness determines whether ...
View Answer

Exam 5: Risk Assessment: Internal Control Evaluation

Management's report on internal controls must include each of the following except

Correct AnswerverifiedShow Answer

The primary objective of procedures performed to obtain an understanding of the entity's internal control is to provide an auditor with

Correct AnswerverifiedShow Answer

The "obtaining an understanding" work phase (Phase 1) of internal control evaluation would not give auditors an overall acquaintance with the client's

Correct AnswerverifiedShow Answer

Which of the following statements is correct regarding internal control?

Correct AnswerverifiedShow Answer

An auditor is evaluating a client's internal controls.Which of the following situations would be the most difficult internal control issue for an auditor to detect?

Correct AnswerverifiedShow Answer

After obtaining an understanding of a client's financial reporting control activities,the auditor would next

Correct AnswerverifiedShow Answer

What is the difference between an internal control's design effectiveness and its operating effectiveness?

Correct AnswerverifiedDesign effectiveness determines whether ...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Design effectiveness determines whether ...
View Answer