Exam 5: Risk Assessment: Internal Control Evaluation

In an audit of financial statements of a non-public company in accordance with generally accepted auditing standards, an auditor is required to:

When obtaining an understanding of an entity's internal control in a financial statement audit at a non-public company, an auditor is not obligated to:

Tracing bills of lading to sales invoices provides evidence that:

Which of the following client internal control activities is not usually performed in the treasurer's department?

Obtaining an understanding of an internal control involves evaluating the design of the control and determining whether the control has been:

Regardless of the assessed level of control risk, an auditor of a non-public company would perform some:

Each of the following types of controls is considered to be an entity-level control, except those:

Which of the following is not a component of internal controls?

Auditors are required to obtain a sufficient understanding of an entity's internal control. This understanding is required by the performance principle of GAAS.Required:What are some of the goals (purposes) for conducting an evaluation of an entity's internal control?What is the impact on substantive testing procedures if the auditor assesses control risk at the "maximum" level? What is the impact on substantive testing procedures if the auditor assesses control risk below the "maximum" level?Should auditors always try to obtain enough evidence to assess control risk below the "maximum" level? Explain.

Management's report on internal controls must include each of the following except:

The ultimate purpose of assessing control risk is to contribute to the auditor's evaluation of the:

Sound internal control can be described as separating all of the following duties and responsibilities except for:

The overall attitude and awareness of an entity's board of directors concerning the importance of the client's internal control usually is reflected in its:

Which of the following is not an input control activity?

Control activities intended to ensure that transactions are recorded in the right period are designed to achieve the ASB assertion of:

After obtaining an understanding of internal controls and assessing control risk on the audit of a non-public company, an auditor decided to perform tests of controls. The auditor most likely decided that:

Which of the following audit procedures most likely would provide an auditor with the most assurance about the effectiveness of the operation of an entity's internal control?

The internal control in small business is highly dependent on the:

The primary objective of procedures performed to obtain an understanding of the entity's internal control is to provide an auditor with:

Which of the following statements is correct regarding internal control?