Auditing Chapter 11 Test Bank Solution Manual Already Passed
2 views 0 purchase
Course
Auditing Chapter 11
Institution
Auditing Chapter 11
Auditing Chapter 11 Test Bank Solution Manual Already Passed
1) Which of the following is not one of the three primary objectives of effective internal control?
A) reliability of financial reporting
B) efficiency and effectiveness of operations
C) compliance with laws and regulations
D) assur...
Auditing Chapter 11 Test Bank Solution Manual Already Passed
1) Which of the following is not one of the three primary objectives of effective internal control?
A) reliability of financial reporting
B) efficiency and effectiveness of operations
C) compliance with laws and regulations
D) assurance of elimination of business risk - Answers D) assurance of elimination of business risk
2) With which of management's assertions with respect to implementing internal controls is the auditor
primarily concerned?
A) efficiency of operations
B) reliability of financial reporting
C) effectiveness of operations
D) compliance with applicable laws and regulations - Answers B) reliability of financial reporting
Internal controls
A) are implemented by and are the responsibility of the auditors.
B) consist of policies and procedures designed to provide reasonable assurance that the company
achieves its objectives and goals.
C) guarantee that the company complies with all laws and regulations.
D) only apply to SEC companies. - Answers B) consist of policies and procedures designed to provide
reasonable assurance that the company achieves its objectives and goals.
4) Internal controls are not designed to provide reasonable assurance that
A) all frauds will be detected.
B) transactions are executed in accordance with management's authorization.
C) the company's resources are used efficiently and effectively.
D) company personnel comply with applicable rules and regulations. - Answers A) all frauds will be
detected.
1) Who is responsible for establishing a private company's internal control?
A) senior management
,B) internal auditors
C) FASB
D) audit committee - Answers A) senior management
2) Two key concepts that underlie management's design and implementation of internal control are
A) costs and materiality.
B) absolute assurance and costs.
C) inherent limitations and reasonable assurance.
D) collusion and materiality. - Answers C) inherent limitations and reasonable assurance.
3) The PCAOB places responsibility for the reliability of internal controls over the financial reporting
process on
A) the company's board of directors.
B) the audit committee of the board of directors.
C) management.
D) the CFO and the independent auditors. - Answers C) management.
5) An act of two or more employees to steal assets and cover their theft by misstating the accounting
records would be referred to as
A) collusion.
B) a material weakness.
C) a control deficiency.
D) a significant deficiency. - Answers A) collusion.
6) Sarbanes-Oxley requires management to issue an internal control report that includes two specific
items. Which of the following is one of these two requirements?
A) a statement that management is responsible for establishing and maintaining an adequate internal
control structure and procedures for financial reporting
B) a statement that management and the board of directors are jointly responsible for establishing and
maintaining an adequate internal control structure and procedures for financial reporting
, C) a statement that management, the board of directors, and the external auditors are jointly
responsible for establishing and maintaining an adequate internal control structure and procedures for
financial reporting
D) a statement that the external auditors are solely responsible for establishing and maintaining an
adequate system of internal control - Answers A) a statement that management is responsible for
establishing and maintaining an adequate internal control structure and procedures for financial
reporting
8) When one material weakness is present at the end of the year, management of a public company
must conclude that internal control over financial reporting is
A) insufficient.
B) inadequate.
C) ineffective.
D) inefficient. - Answers C) ineffective.
9) The auditors primary purpose in auditing the client's system of internal control over financial
reporting is
A) to prevent fraudulent financial statements from being issued to the public.
B) to evaluate the effectiveness of the company's internal controls over all relevant assertions in the
financial statements.
C) to report to management that the internal controls are effective in preventing misstatements from
appearing on the financial statements.
D) to efficiently conduct the Audit of Financial Statements. - Answers B) to evaluate the effectiveness of
the company's internal controls over all relevant assertions in the financial statements.
10) The internal control framework used by most U.S. companies is the ________ framework.
A) FASB
B) PCAOB
C) COSO
D) SEC - Answers C) COSO
11) In performing the audit of internal control over financial reporting, the auditor emphasizes internal
control over classes of transactions because
A) the accuracy of accounting system outputs depends heavily on the accuracy of inputs and processing.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller TutorJosh. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.29. You're not tied to anything after your purchase.
