Exam 9: Assessing Control Risk and Designing Test of Controls

Use of electronic funds transfers (such as electronic data interchange and online banking)has which of the following effects on the audit risk model?

If an external auditor's client has used a service organization during the year for some of its payroll processing and accounting,which of the following steps should the external auditor take if he or she decides to use the service organization auditor's report as audit evidence that the entity's controls are operating effectively for certain assertions?

Jenny is the information technology support manager at CMH.Jenny is considered to be a super-user at CMH since she can circumvent normal controls.In order to address the risk of super-users,management should

Each key control that the auditor intends to rely on must be supported by sufficient

One approach to audit through the computer to test controls is to

The internal control objective of accuracy is related to the financial statement assertion of

Narratives,flowcharts,and internal control questionnaires are three commonly used methods of

The existence of advanced automated systems affects the audit process.Which of the following characteristics is an indicator of the presence of an advanced automated information system?

A secondary objective of the auditor's study and evaluation of internal control is that the study and evaluation provide

Which of the following statements is true relating to internal control testing?

After considering a client's internal controls,an auditor has concluded that the internal controls are well designed and are functioning as intended.Under these circumstances,the auditor would most likely

Paul is in the process of performing procedures to obtain the necessary understanding of the client's internal controls.As part of this process,Paul received from the client completed narratives,flowcharts,and internal control questionnaires.Paul can use this information from the client

You have just finished documenting your understanding of cycle controls at an audit engagement. Required:A)Explain how you will identify the controls that will be tested.B)What process will you follow for weakness in internal controls?

List and explain the methods of documenting the auditor's understanding of internal controls.

A)The first step in the auditor's study and evaluation of internal control is to obtain an understanding of internal control for audit planning purposes.List the remaining steps.B)Which two assessments must be made prior to testing controls? C)Describe five common procedures an auditor can use to obtain an understanding of internal control design.

Describe the three types of tests that need to be performed by the auditor when auditing a client's data conversion process.

A procedure that would most likely be used by an auditor in performing tests of control procedures that involve segregation of functions and that leave no transaction trail is

When the auditor attempts to determine the operation of the accounting system by tracing one or a few transactions through the accounting system,this is referred to as

The procedures to test effectiveness of control policies and procedures in support of a reduced assessed control risk are called

Control risk is a measure of the auditor's expectation that internal controls will