10/28/24, 6:08 AM Chapter 3 - Audit Theory and Practice |2024-2025 UPDATE|COMPREHENSIVE MOST TESTED QUESTIONS AND VERIFIE…
Chapter 3 - Audit Theory and Practice |2024-
2025 UPDATE|COMPREHENSIVE MOST TESTED
QUESTIONS AND VERIFIED SOLUTIONS|GET IT
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Terms in this set (48)
1. The quality of an All of the above
organization's internal
controls affect which of
the following?
a.
The reliability of financial
data.
b.
The ability of
management to make
good decisions.
c.
The ability to remain in
business.
d.
All of the above.
,10/28/24, 6:08 AM Chapter 3 - Audit Theory and Practice |2024-2025 UPDATE|COMPREHENSIVE MOST TESTED QUESTIONS AND VERIFIE…
2. Internal control is a Both A and B
process designed to
achieve objectives in
which one of the
following categories?
a.
Reliability of financial
reporting.We could just
undo those final steps
b.
Compliance with
applicable laws.
c.
Ineffectiveness of
operations.
d.
Both A and B.
,10/28/24, 6:08 AM Chapter 3 - Audit Theory and Practice |2024-2025 UPDATE|COMPREHENSIVE MOST TESTED QUESTIONS AND VERIFIE…
3. Which of the following All are reasons why auditors must gain an
is not a reason that the understanding of the client's internal control system.
auditor must gain an
understanding of the
client's internal control
system?
a.
Better understand the
client, its risks, and how it
manages those risks.
b.
Assess control risk and
identify the types of
financial statement
misstatements that are
most likely to occur.
c.
Plan direct tests of
account balances to
determine if
misstatements have
occurred.
d.
All are reasons why
auditors must gain an
understanding of the
client's internal control
system.
, 10/28/24, 6:08 AM Chapter 3 - Audit Theory and Practice |2024-2025 UPDATE|COMPREHENSIVE MOST TESTED QUESTIONS AND VERIFIE…
4. Which one of the All of the above
following groups is
interested in an
organization's control
structure?
a.
Board members.
b.
Lenders.
c.
Auditors. or
d.
All of the above.
5. With whom does the Management
tone of internal control
typically originate?
a.
Auditors.
b.
Employees.
c.
Management.
d.
Stockholders.
6. Which of the following Control Risk
is not a major
components of an
organization's internal
control structure?
a.
Control risk.
b.
The control environment.
c.
Risk assessment.
d.
Control activities.
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