Question 1

The concept of ____________________________ recognizes that the cost of an entity's internal control should not exceed the benefits that are expected to be derived.

Accepted Answer

The answer of The concept of ____________________________ recognizes that the...

Question 2

A material weakness results in a ________________________________ that a ___________________________________ would not be prevented or detected on a timely basis.

Accepted Answer

The answer of A material weakness results in a ________________________________...

Question 3

Discuss the difference between an internal control's design effectiveness and its operating effectiveness.

Accepted Answer

The answer of Discuss the difference between an internal control's...

Question 4

A(n)____________________________ is a single procedure that produces both control and substantive evidence.

Accepted Answer

The answer of A(n)____________________________ is a single procedure that produces...

Question 5

Each of the following five cases illustrates specific control activities from a client's revenue cycle (accounts receivable/sales).For each of the procedures,(a)identify which management assertions apply and (b)what potential category of errors and frauds can be prevented.

Accepted Answer

The answer of Each of the following five cases illustrates...

Question 6

To reduce the control risk to a low level,auditors must determine (1)the ________________________________ of company compliance with control policies and (2)the _____________________________________ of company compliance.

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The answer of To reduce the control risk to a...

Question 7

The audit team is responsible for designing an evaluation of _________________________ internal control systems and _____________________________ the control _____________________________ of that system.

Accepted Answer

The answer of The audit team is responsible for designing...

Question 8

____________________________________ are specific actions taken by a client's management and employees to help ensure that management directives are carried out.

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The answer of ____________________________________ are specific actions taken by a...

Question 9

Significant deficiencies in internal control also include the more serious condition called a ___________________________________.

Accepted Answer

The answer of Significant deficiencies in internal control also include...

Question 10

The following are a number of ASB management assertions.
A.Occurrence
B.Completeness
C.Rights and obligations
D.Allocation or valuation
E.Classification
F.Existence
G.Cutoff
H.Accuracy
I.Understandability
For each of the following control activities,place the letter of the preceding management assertion that best applies to each of the following controls in the blank space.
_____ 1.Matching shipping documents with sales invoices before a sale is recorded.
_____ 2.Balancing the total of individual customers' receivables with the control account.
_____ 3.Obtaining sales manager's approval of taking discounts.
_____ 4.Doing a computer check for billing the quantity shipped,list price,and total.
_____ 5.Accounting for numerical sequence of prenumbered shipping documents.

Accepted Answer

The answer of The following are a number of ASB...

Question 11

_____________________________________ reduces opportunities for a person to be in a position to perpetrate and conceal errors and frauds when performing their normal duties.

Accepted Answer

The answer of _____________________________________ reduces opportunities for a person to...

Question 12

Discuss some of the problems in establishing an internal control system in a small business.

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The answer of Discuss some of the problems in establishing...

Question 13

Auditors perform ________________________________ to determine how well the company's controls actually functioned during the period under audit.

Accepted Answer

The answer of Auditors perform ________________________________ to determine how well...

Question 14

_____________________________ to assets and important records,documents,and blank forms should be limited to authorized personnel in a well-controlled company.

Accepted Answer

The answer of _____________________________ to assets and important records,documents,and blank...

Question 15

Internal control systems generally provide _____________________________ assurance that the objectives of internal control are satisfied.

Accepted Answer

The answer of Internal control systems generally provide _____________________________ assurance...

Question 16

The COSO report identifies the objectives to be achieved by internal control as (1)effectiveness and efficiency of ____________________________,(2)reliability of ___________________________________,and (3)compliance with ____________________ and ____________________________.

Accepted Answer

The answer of The COSO report identifies the objectives to...

Question 17

_________________________________ in internal control are matters that the auditors believe should be communicated to the clients' audit committee.

Accepted Answer

The answer of _________________________________ in internal control are matters that...

Question 18

In gathering evidence about the client's internal control,auditors may use a(n)____________________________,which is a checklist of internal control-related questions.

Accepted Answer

The answer of In gathering evidence about the client's internal...

Question 19

List several elements of a company's control environment.

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The answer of List several elements of a company's control...

Question 20

Identify and explain briefly the phases of an internal control evaluation.

Accepted Answer

The answer of Identify and explain briefly the phases of...

Quiz 5: Risk Assessment: Internal Control Evaluation