Accy 171 Exam 1

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Accy 171 Exam 1
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Accy 171 Exam 1
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  1. The form of attestation that provides the highest form of assurance is a(n):
    A. Assembly
    B. Review
    C. Examination
    D. Compilation
    C. Examination
    (this multiple choice question has been scrambled)
  2. Audits of financial statements include an expression of a conclusion about which of the following financial statement characteristics?
    A. Governance
    B. Reliability
    C. Relevance
    D. Timeliness
    B. Reliability
    (this multiple choice question has been scrambled)
  3. A review of company's fin state by a CPA firm:
    A. Is designed to provide limited assurance.
    B. Concludes with the issuance of a report expressing the CPA's opinion as to the fairness of the statements.
    C. Is significantly less in scope than an audit and results in a report which provides positive assurance, although not absolute assurance.
    D. Is similar in scope to an audit and adds similar credibility to the statements.
    A. Is designed to provide limited assurance.
    (this multiple choice question has been scrambled)
  4. The Sarbanes Oxley Act included provisions establishing the:
    A. Auditing Standards Board
    B. Congressional Auditing Overview Board.
    C. Public Company Accounting Oversight Board.
    D. Securities and Exchange Commission
    C. Public Company Accounting Oversight Board.
    (this multiple choice question has been scrambled)
  5. In performing a financial statement audit, which of the following would an auditor be least likely to consider?
    A. Fairness of the financial statement amounts
    B. Internal control
    C. Compliance with GAAP
    D. Quality of management's business decisions
    D. Quality of management's business decisions
    (this multiple choice question has been scrambled)
  6. Which of the following is not considered a type of audit?
    A. Sufficiency audit
    B. Financial statement audit
    C. Operational audit
    D. Compliance audit
    A. Sufficiency audit
    (this multiple choice question has been scrambled)
  7. Internal auditors are most likely to issue a report on which of the following?
    A. Tax compliance
    B. Annual financial statement reporting
    C. Internal Control
    D. Quarterly financial statement reporting
    C. Internal Control
    (this multiple choice question has been scrambled)
  8. With which of the following is the AICPA least concerned?
    A. Self regulation of the accounting profession
    B. Standards guiding the conduct of internal auditors
    C. Professional standards for CPAs
    D. Research and development of accounting standards
    B. Standards guiding the conduct of internal auditors
    (this multiple choice question has been scrambled)
  9. If an auditor had a substantial stock investment in a client that they were auditing, which of the following would be true?
    A. The auditor would be violating the FASB standards
    B. The auditor would lack independence
    C. The auditor would be violating the IIA standards
    D. The auditor would be violating the institute of Management Accounting Standards
    B. The auditor would lack independence
    (this multiple choice question has been scrambled)
  10. The attest function:
    A. Is an essential part of every engagement performed by a CPA.
    B. Requires a review of a sample of transactions during the period under examination.
    C. Requires a complete review of all transactions during the period under examination.
    D. Includes the preparation of a written report of the CPA's findings.
    D. Includes the preparation of a written report of the CPA's findings.
    (this multiple choice question has been scrambled)
  11. GAAP are distinguished from GAAS in that:
    A. When GAAP is violated, sufficiently strong GAAS may make up for the most of GAAP deficiencies.
    B. GAAP - principles auditors follow when conduct audit; GAAS are standards for presenting financial statements and underlying transactions
    C. GAAP - principles for presentation of the financial statements/underlying transactions, GAAS are standards auditors follow when conduct an audit.
    D. GAAP promulgated by the SEC, while GAAS are promulgated by FASB
    C. GAAP - principles for presentation of the financial statements/underlying transactions, GAAS are standards auditors follow when conduct an audit.
    (this multiple choice question has been scrambled)
  12. When GAAS does not provide "hard/fast rules," they provide subject guides which allow auditors to:
    A. Only apply those standards that are important to the audit.
    B. Tailor their audit to procedures requested by management.
    C. Accurately interpret the profession's Code of Professional Conduct
    D. Use adequate professional judgment when applying the standards.
    D. Use adequate professional judgment when applying the standards.
    (this multiple choice question has been scrambled)
  13. The Sarbanes-Oxley Act requires that auditors of certain large publicly traded companies in the US perform an integrated audit that includes providing an audit report on a company's internal control and which of the following?
    D. Use adequate professional judgment when applying the standards.
    B. Financial statements
  14. Which of follow is not underlying premise of audit relating to mgmt.'s response to provide an auditor?
    A. Provide all info relevant to the preparation and fair presentation of the financial statements.
    B. Provide inner-connectivity to all operating databases used during the previous three periods
    C. Provide additional info requested by the auditor.
    D. Provide unrestricted access to those within the entity whom the auditor determines it necessary to obtain audit evidence.
    B. Provide inner-connectivity to all operating databases used during the previous three periods
    (this multiple choice question has been scrambled)
  15. The auditors provide an opinion on whether the financial statements are presented in accordance with the:
    A. Generally Accepted Auditing Standards
    B. Current Industry standards
    C. Applicable financial reporting framework
    D. Attestation standards
    C. Applicable financial reporting framework
    (this multiple choice question has been scrambled)
  16. The primary difference between financial statement errors and fraud is that:
    A. Errors are more likely to provide an indication that an illegal act has occurred.
    B. Errors are unintentional mistakes or omissions, while fraud involves intentional misstatements.
    C. There is no difference as errors and fraud have the same meaning.
    D. Errors are intentional misstatements by mgmt., while fraud involves unintential mistakes or ommisions.
    B. Errors are unintentional mistakes or omissions, while fraud involves intentional misstatements.
    (this multiple choice question has been scrambled)
  17. Auditors responsibility for identifying "direct effect: illegal acts differs from their responsibility for detecting
    A. Other illegal acts
    B. fraud
    C. Management fraud
    D. errors
    A. Other illegal acts
    (this multiple choice question has been scrambled)
  18. When the Statements on Auditing Standards use the word "must" relating to a requirement, it means that the auditor:
    A. May only decide not to perform the procedure in the audit of a nonpublic company
    B. May use prof judgment in all circumstances in deciding whether to meet the requirement.
    C. Must fulfill the req when it is possible
    D. Must comply with the req unless the auditor finds that alternative actions are sufficient
    C. Must fulfill the req when it is possible
    (this multiple choice question has been scrambled)
  19. The level of assurance provided by an audit of detecting a material misstatement is referred to as:
    A. Negative assurance
    B. Reasonable assurance
    C. High Assurance
    D. Absolute assurance
    B. Reasonable assurance
    (this multiple choice question has been scrambled)
  20. Which of the following is not a function of the Public Company Accounting Oversight Board?
    A. Establish or adopt auditing standards
    B. Register public accounting firms that prepare audit reports of publicly trade companies.
    C. Conduct inspections of registered public accounting firms.
    D. Promulgate accounting principles
    D. Promulgate accounting principles
    (this multiple choice question has been scrambled)
  21. If financial statements are not fairly presented on an overall basis, the most likely type of audit opinion will be a(n):
    A. Qualified opinion
    B. Adverse opinion
    C. GAAP departure opinion
    D. Disclaimer of opinion
    B. Adverse opinion
    (this multiple choice question has been scrambled)
  22. Professional skepticism includes a questioning mind and a(n):
    A. Detailed analysis of internal control procedures.
    B. Critical assessment of audit evidence
    C. Investigation of all laws impacting the organization.
    D. Analysis of each transaction occurring during the period.
    B. Critical assessment of audit evidence
    (this multiple choice question has been scrambled)
  23. Ethical dilemmas generally involve situations in which the:
    A. Welfare of one or more individuals is affected by another's decision.
    B. The IIA Code of conduct has recently been modified.
    C. Individual involved must make a decision that affects continuation of an ethical approach.
    D. AICPA has established "rulings" prohibiting conflicts of interest
    A. Welfare of one or more individuals is affected by another's decision.
    (this multiple choice question has been scrambled)
  24. Which of the following forms of organization is most likely to restrict the personal liability of CPAs not involved on a particular audit that their firm has conducted.
    A. Restricted Company
    B. Professional Corporation
    C. Limited liability partnership
    D. Partnership
    C. Limited liability partnership
    (this multiple choice question has been scrambled)
  25. Which of the following is correct concerning the AICPA Conceptual Framework for intendant standards?
    A. Applies when the Code of Professional Conduct does not directly address a threat to independence.
    B. It relates to actual independence, not independence in appearance.
    C. Suggest CPA should evaluate whether practice two individual would lead another CPA, aware of relevant facts, to conclude that an unacceptable risk of nonindependance exists.
    D. Relevant only in those situations in which consulting services are being performed.
    A. Applies when the Code of Professional Conduct does not directly address a threat to independence.
    (this multiple choice question has been scrambled)
  26. Which of the following is not considered by the AICPA Conceptual Framework for Independent Standards Board category of threat to auditor independence?
    A. financial self-interest
    B. safeguards
    C. Adverse interest
    D. Management participation
    B. safeguards
    (this multiple choice question has been scrambled)
  27. A CPA's investment in the stock of an audit client is considered a(n):
    A. Direct financial interest that impairs independence when material
    B. Direct financial interest which impairs independence when material
    C. Direct financial interest that impairs independence regardless of amount
    D. Direct financial interest which impairs independence regardless of amount
    D. Direct financial interest which impairs independence regardless of amount
    (this multiple choice question has been scrambled)
  28. Which of the following statements are true with respect to the SECs concept of indendence when auditors both prepare financial statements and audits those financial statements for a client?
    A. The auditor is not independent
    B. The auditor is independent if they are able to maintain a level of professional detachment
    C. The auditor can audit financial statements only if the audit process does not culminate in the expression of an opinion on the financial statements.
    D. The auditor cannot audit the financial statements since the auditor lacks integrity.
    A. The auditor is not independent
    (this multiple choice question has been scrambled)
  29. In which circumstance is a CPA firm's independence most likey to be impaired?
    A. Father of the audit senior holds a material financial interest in the client of which the senior is unaware.
    B. Partner in charge of the office's compensation is affected by office profitability, a portion of which arises from this audit.
    C. Individual on the audit has a close relative who is a receptionist for the client.
    D. Spouse of a staff member on the audit has an immaterial common stock investment in the audit client
    D. Spouse of a staff member on the audit has an immaterial common stock investment in the audit client
    (this multiple choice question has been scrambled)
  30. Which of the following partners is least likely considered a "covered member" for purposes of audit of Company A, performed by the Chicago office of a national CPA firm?
    A. A parent in the San Diego office of CPA firm who maintains small, immaterial investment in Company A.
    B. A partner in the Chicago office who worked on the Company A audit in previous years, but currently has no responsibilities with respect to the audit.
    C. The partner in charge of the entire CPA firm.
    D. The partner in charge of the Chicago office.
    A. A parent in the San Diego office of CPA firm who maintains small, immaterial investment in Company A.
    (this multiple choice question has been scrambled)
  31. Which of the following is a correct statement concerning the Sarbanes-Oxley Act of 2002?
    A. It applies to audits of all companies doing business in the US.
    B. Make performance of nonattestation service related to financial information system and design and implementation for audit clients unlawful.
    C. It requires the divestiture of consulting department of CPA firm performing audit of publicly traded companies
    D. It requires the reporting of all illegal acts identified during an audit to the Justice Department.
    B. Make performance of nonattestation service related to financial information system and design and implementation for audit clients unlawful.
    (this multiple choice question has been scrambled)
  32. Contingency fee based pricing of accounting services is:
    A. Never restricted in public accounting practice
    B. Prohibited if associated with the type of audit opinion received.
    C. Considered an act discreditable to the profession.
    D. Always strictly prohibited in public accounting practice
    B. Prohibited if associated with the type of audit opinion received.
    (this multiple choice question has been scrambled)
  33. Which of the following best describes the passing of confidential information from a client to its auditor, that information:
    A. Can only be released for peer reviews after receiving permission from the client.
    B. Should be conveyed to the public if it affects the "correctness" of the financial statements.
    C. Is not legally protected and can be subpoenaed by a federal court.
    D. Should in no circumstatnces be conveyed to third parties.
    C. Is not legally protected and can be subpoenaed by a federal court.
    (this multiple choice question has been scrambled)
  34. Which of the following is a correct statement concerning a publicly traded company that purchases the practice of a public accy firm?
    A. It must separate performance of attestation service and allow them to perform by remaining "shell" public accy firm it has purchased (or by another public accy firm)
    B. It may not restrict its liability in any manner for services it now provides which previously had been provided by the traditional CPA firm.
    C. It must be owned by partners who are involved in public accounting.
    D. It can perform all services ordinarily performed by a traditional CPA firm within framework of its own companies entity.
    A. It must separate performance of attestation service and allow them to perform by remaining "shell" public accy firm it has purchased (or by another public accy firm)
    (this multiple choice question has been scrambled)
  35. Which of the following is not a component of audit risk?
    A. Inherent Risk
    B. Detection risk
    C. Control risk
    D. Sufficiency Risk
    D. Sufficiency Risk
    (this multiple choice question has been scrambled)
  36. Which type of risk does an auditor have control over through substantive auditing procedures?
    A. Sufficiency Risk
    B. Control Risk
    C. Detection Risk
    D. Inherent Risk
    C. Detection Risk
    (this multiple choice question has been scrambled)
  37. Which type of risk does the management of a company have the most control over in the short term?
    A. Control Risk
    B. Detection Risk
    C. Inherent Risk
    D. Sufficiency Risk
    A. Control Risk
    (this multiple choice question has been scrambled)
  38. Which of the following descriptions best describes inherent risk?
    A. Auditing procedures fail to find a material misstatement.
    B. A companies internal control fails to identifiy a material misstatement in a timely fashion.
    C. The possibility that a material misstatement will occur in any given account before considering internal control.
    D. Auditors fail to discover a material misstatement in the course of their audit and do not modify their audit opinion.
    C. The possibility that a material misstatement will occur in any given account before considering internal control.
    (this multiple choice question has been scrambled)
  39. Further audit procedures include:
    A. Test of controls
    B. Diagrams of transaction cycles
    C. Audit planning
    D. Risk assessment procedures
    A. Test of controls
    (this multiple choice question has been scrambled)
  40. Which of the following is a basic procedure used in an audit?
    A. Substantive procedures
    B. Test of cycles
    C. Test of evidential directionality
    D. Risk analytic testing
    A. Substantive procedures
    (this multiple choice question has been scrambled)
  41. Auditors must gather "sufficient appropriate audit evidence" to support their audit opinion. Which of the following is least likely to serve as a subject for performing other audit procedures?
    A. The physical observation of the counting the company inventory.
    B. Tracing an amount on the financial statement back through the accounting system to the underlying supporting document.
    C. Sending letters to debtors/creditors of the company to confirm amounts the company owes or is owed.
    D. Obtaining a representation letter signed by top management.
    D. Obtaining a representation letter signed by top management.
    (this multiple choice question has been scrambled)
  42. The type of transactions that ordinarily have a high inherent risk because they involve management judgments or assumptions are referred to as:
    A. Nonroutine transactions
    B. Routine transactions
    C. Estimation transactions
    D. Substantive transactions
    C. Estimation transactions
    (this multiple choice question has been scrambled)
  43. Which of the following ordinarily is considered the weakest form of evidence?
    A. Documentary evidence obtained from inside the company
    B. Documentary evidence obtained from outside the company
    C. Actual physical evidence
    D. Replies by company employees to auditor oral inquires.
    D. Replies by company employees to auditor oral inquires.
    (this multiple choice question has been scrambled)
  44. Which method of analytical procedure analysis is most useful because many expenses, such as COGS, might be expected to bear a predictable relationship to net sales?
    A. Horizontal analysis
    B. Vertical analysis
    C. Trend analysis
    D. Reasonableness analysis
    B. Vertical analysis
    (this multiple choice question has been scrambled)
  45. One type of analytical procedure is trend analysis. Which of the following is the best example of trend analysis?
    A. Comparison of inventory levels over the past 3 years
    B. Comparison of accounting records to budgeted amounts
    C. Comparison of interest expenses to outstanding loan balances.
    D. Comparison of company financial rations to that of its competitors.
    A. Comparison of inventory levels over the past 3 years
    (this multiple choice question has been scrambled)
  46. Which of the following is not one of the primary approaches auditors use when evaluating the reasonableness of accounting estimates?
    A. Review subsequent events or transactions bearing on the estimate.
    B. Confirm estimates directly with outsiders.
    C. Review and test management's process of developing estimates.
    D. Independently develop an estimate of the amount to compare to management's estimate
    D. Comparison of inventory levels over the past 3 years
    (this multiple choice question has been scrambled)
  47. Audit documentation relating to the A company audit should be sufficient to allow which type of auditor to understand the audit work performed?
    A. Any auditor
    B. An experienced auditor
    C. Any auditor that works on A company's audit
    D. An experienced auditor with experience on A company's audit
    B. An experienced auditor
    (this multiple choice question has been scrambled)
  48. Documentation may not be deleted from the working papers after the:
    A. Final day of fieldwork
    B. Date of the audit report
    C. Documentation completion date
    D. Audit report delivery date
    C. Documentation completion date
    (this multiple choice question has been scrambled)
  49. Adequate planning and design of an audit is necessary for an auditor to restrict which type of audit risk?
    A. Control Risk
    B. Inherent Risk
    C. Sufficiency Risk
    D. Detection Risk
    D. Detection Risk
    (this multiple choice question has been scrambled)
  50. B&M auditors accepted as the auditors of (3W). What are B&M's responsibilities with regard to contacting 3W's predecessor auditors?
    A. If 3W has a disagreement with its predecessor auditors, B&M should not contact the predecessor auditors.
    B. B&M is not required to attempt to communicate with the predecessor auditors under any circumstances.
    C. It is unethical for B&M to ask the predecessor auditors about the integrity of 3W's management.
    D. B&M should attempt to communicate with the predecessor auditors and ask how accounting policy disagree with 3W
    D. B&M should attempt to communicate with the predecessor auditors and ask how accounting policy disagree with 3W
    (this multiple choice question has been scrambled)
  51. An engagement letter is best described as which of the following?
    A. A letter from the auditor to company mgmt. specifies responses of both company and auditors in completing audit and the timing for its completion.
    B. A letter from company mgmt. to auditors specifying managements expectation for completion of audit on a timely basis and fees.
    C. A letter from the auditors to company management specifying that management is responsibly for the fin statements and the auditors will issue opinion on the fin statements.
    D. A letter from the audit committee to the auditor that indicates the auditor has been engaged to perform the audit and the fees to be paid.
    A. A letter from the auditor to company mgmt. specifies responses of both company and auditors in completing audit and the timing for its completion.
    (this multiple choice question has been scrambled)
  52. Materiality can best be described as which of the following?
    A. Materiality is typically measured as a fixed perecentage of net income.
    B. Materiality does not depend on the company being audited, but is solely dependent on the auditors' discretion.
    C. Materiality is the amount at which judgments based on the financial statements may be altered.
    D. Materiality is typically measured as a fixed percentage of assets
    C. Materiality is the amount at which judgments based on the financial statements may be altered.
    (this multiple choice question has been scrambled)
  53. Which of the following is least likely to be required on an audit?
    A. Test appropriateness of journal entries and adjustments
    B. Make a legal determination of whether fraud has occurred.
    C. Evaluate the business rationale for significant, unusual transactions
    D. Review accounting estimates for biases
    B. Make a legal determination of whether fraud has occurred.
    (this multiple choice question has been scrambled)
  54. Which of the following is most likely to be an overall response to fraud risks identified in an audit?
    A. Place increased emphasis on the audit of objective transactions rather than subjective transactions.
    B. Only use certified public accountants on the engagement
    C. Supervise members of the audit team less closely and rely more upon judgment.
    D. Use less predictable audit procedures
    D. Use less predictable audit procedures
    (this multiple choice question has been scrambled)
  55. Which of the following is most likely to be presumed to represent a fraud risk on an audit?
    A. Introduction of significant new products
    B. Improper revenue recognition
    C. Improper interest expense accrual
    D. Captialization of repairs and maintenance expense into the property, plant and equipment asset account.
    B. Improper revenue recognition
    (this multiple choice question has been scrambled)
  56. Which of the following is least likely to be included in an auditor's inquire of management while obtaining information to identify the risks of material misstatement due to fraud?
    A. Has it reported to the audit committee the nature of the company's internal control?
    B. Are financial reporting operations controlled by and limited to one location?
    C. Does it have programs to mitigate fraud risks?
    D. Does it have knowledge of fraud or suspect fraud?
    B. Are financial reporting operations controlled by and limited to one location?
    (this multiple choice question has been scrambled)
  57. An audit plan is a:
    A. Generic document that auditing firms have developed to lead process of audit through system and logical process
    B. Budget of the time that should be necessary to complete each phase of the audit procedures.
    C. Document provides overview of company and a general plan for the audit work to be accompanied, timing of the work, and other matters of concern to the audit
    D. Detailed plan of analytical procedures and all substantive tests to be performed in course of audit
    C. Document provides overview of company and a general plan for the audit work to be accompanied, timing of the work, and other matters of concern to the audit
    (this multiple choice question has been scrambled)
  58. Which state describes interaction of the systems and substantive approaches in the audit plan?
    A. The systematic approach focuses on use of computer systems to aid audit while substantial appropriate focus on manual tests.
    B. A thoroughly designed systematic approach to auditing can eliminate the need for substantive procedures.
    C. The systematic approach focuses on detailed testing of specific account accuracy, while substantive approach is the testing controls to make sure they are effective.
    D. The systematic approach focuses on testing controls if effective, while the substantive approach is the detailed testing of specific accounts for accuracy.
    D. The systematic approach focuses on testing controls if effective, while the substantive approach is the detailed testing of specific accounts for accuracy.
    (this multiple choice question has been scrambled)
  59. Tracing from source documents to journals most directly addresses which financial statement assertion
    A. Existence
    B. Rights
    C. Valuation
    D. Completeness
    D. Completeness
    (this multiple choice question has been scrambled)
  60. Internal control is primarily established within a company to do which of the following?
    A. Catch all errors that may occur n the company
    B. Provide reasonable assurance that the company's objective will be achieved
    C. Prevent fraud
    D. Aid in the effective auditing of the company.
    B. Provide reasonable assurance that the company's objective will be achieved
    (this multiple choice question has been scrambled)
  61. Provide reasonable assurance with respect to which of the following is not required under the internal control provisions of the Foreign Corrupt Practices Act?
    A. Access to assets is limited to members of management
    B. Transactions are recorded to maintain accountability for assets
    C. transactions are recorded to permit the preparation of reliable financial statements.
    D. Managements responsibility for knowledge and authorization of transactions
    A. Access to assets is limited to members of management
    (this multiple choice question has been scrambled)
  62. Which of the following is considered a control environment factor by the COSO definition of internal control
    A. Risk Assessment
    B. Control objectives
    C. Reasonable assurance
    D. Integrity and ethical values
    D. Integrity and ethical values
    (this multiple choice question has been scrambled)
  63. Billy responsible for custody of the fixed goods in warehouse. If this company wishes to maintain a strong internal control, which of the following response are incompatible with his primary job?
    A. He is responsible for receiving of goods in the warehouse
    B. He is also responsible for the company's fixed assets control ledger.
    C. He is responsible for the accounting records for all receipts/shipments of goods from the warehouse
    D. He is responsible for issuing goods for shipment.
    C. He is responsible for the accounting records for all receipts/shipments of goods from the warehouse
    (this multiple choice question has been scrambled)
  64. Which of the following is least likely when an auditor performs an integrated audit of a public company's financial statements?
    A. Issuing an audit report on internal control over financial reporting
    B. Issuing an audit report on the financial statement
    C. Omitting tests of controls for several major accounts
    D. Performing tests of internal control design effectiveness.
    Omitting tests of controls for several major accounts
  65. Which of the following describes the functionality of a fidelity bond?
    A. An insurance policy that covers theft by a bonded employee
    B. A contract between parents and their children to remain celebate.
    C. It is a procedure to separate the duties of employees
    D. A short term investment that is secured by a bank
    A. An insurance policy that covers theft by a bonded employee
    (this multiple choice question has been scrambled)
  66. Tests of controls are used to test whether controls are:
    A. Operating effectively
    B. Properly documented by the client
    C. Implemented (placed into operation)
    D. Properly accumulated into balance sheet totals
    A. Operating effectively
    (this multiple choice question has been scrambled)
  67. Tests of controls are least likely to include
    A. Reperformance of a control
    B. Observation of the application of an accounting procedure
    C. Inquiries of appropriate client vendors
    D. Inspection of document.
    C. Inquiries of appropriate client vendors
    (this multiple choice question has been scrambled)
  68. Which of the following is most likely to be considered an inherent limitation of a client's internal control?
    A. Human Errors
    B. Managements interest in a profitable enterprise.
    C. An effective audit committee.
    D. Complexity of the information system
    A. Human Errors
    (this multiple choice question has been scrambled)
  69. Which of the following is one of the most fundamental and effective controls?
    A. Segregation of incompatible duties across several people
    B. Increased use of computers for recording accounting transactions
    C. Increased reliance on internal auditors to monitor accounting systems
    D. Having internal auditors report only to the board of directors.
    A. Segregation of incompatible duties across several people
    (this multiple choice question has been scrambled)
  70. Control risk is most likely to be assessed at a level below the maximum when?
    A. No tests of controls have been performed
    B. Tests of controls have been performed
    C. The results of the consideration of internal control suggest that controls are not operating effectively.
    D. Externally generated evidence supports management's contentions relating to internal control
    B. Tests of controls have been performed
    (this multiple choice question has been scrambled)
  71. The results of the consideration of internal control are least likely to affect the auditors' decisions pertaining to:
    A. Detailed tests of ending balances
    B. The use of analytical procedures
    C. The assessment of control risk
    D. The assessment of inherent risk
    D. The assessment of inherent risk
    (this multiple choice question has been scrambled)

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