Question 1

When duties cannot be segregated, the most important internal control procedure is

Accepted Answer

A)  supervision 
B)  independent verification 
C)  access controls 
D)  accounting records 
A)  supervision 
B)  independent verification 
C)  access controls 
D)  accounting records

Question 2

When planning the audit, information is gathered by all of the following methods except

Accepted Answer

A)  completing questionnaires 
B)  interviewing management 
C)  observing activities 
D)  confirming accounts receivable 
A)  completing questionnaires 
B)  interviewing management 
C)  observing activities 
D)  confirming accounts receivable

Question 3

What are the key points of the section 404 of the Sarbanes-Oxley Act?

Accepted Answer

Section 404 requires the management of p

Question 4

Control activities under SAS 109/COSO include

Accepted Answer

A)  IT Controls, preventative controls, and Corrective controls 
B)  physical controls, preventative controls, and corrective controls. 
C)  general controls, application controls, and physical controls. 
D)  transaction authorizations, segregation of duties, and risk assessment 
A)  IT Controls, preventative controls, and Corrective controls 
B)  physical controls, preventative controls, and corrective controls. 
C)  general controls, application controls, and physical controls. 
D)  transaction authorizations, segregation of duties, and risk assessment

Question 5

Define and contrast attestation services and advisory services.

Accepted Answer

Attest services are engagements in which

Question 6

The board of directors consists entirely of personal friends of the chief executive officer. This indicates a weakness in

Accepted Answer

A)  the accounting system 
B)  the control environment 
C)  control procedures 
D)  this is not a weakness 
A)  the accounting system 
B)  the control environment 
C)  control procedures 
D)  this is not a weakness

Question 7

Preventive controls are passive techniques designed to reduce fraud.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true?

Accepted Answer

A)  In the CBIS environment, auditors gather evidence relating only to the contents of databases, not the reliability of the computer system. 
B)  Conducting an audit is a systematic and logical process that applies to all forms of information systems. 
C)  Substantive tests establish whether internal controls are functioning properly. 
D)  IT auditors prepare the audit report if the system is computerized. 
A)  In the CBIS environment, auditors gather evidence relating only to the contents of databases, not the reliability of the computer system. 
B)  Conducting an audit is a systematic and logical process that applies to all forms of information systems. 
C)  Substantive tests establish whether internal controls are functioning properly. 
D)  IT auditors prepare the audit report if the system is computerized.

Question 9

Use the internal control procedures listed below to complete statements.
 $\begin{array}{lccc}
\text { segregation of duties} &  \text { specitic authorization}\
\text { general authorization} & \text { accounting records}\
\text { access controls} & \text { independent verification.}\
\text { supervision}\
\end{array}$

-Sequentially numbering all sales invoices is an example of __________________________.

Accepted Answer

The answer of Use the internal control procedures listed below...

Question 10

Use the internal control procedures listed below to complete statements.
 $\begin{array}{lccc}
\text { segregation of duties} &  \text { specitic authorization}\
\text { general authorization} & \text { accounting records}\
\text { access controls} & \text { independent verification.}\
\text { supervision}\
\end{array}$

-The internal audit department recalculates payroll for several employees each pay period. This is an example of __________________________.

Accepted Answer

independen

Question 11

Distinguish between errors and irregularities. Which do you think concern the auditors the most?

Accepted Answer

Errors are unintentional mistakes; while

Question 12

What are the components of audit risk?

Accepted Answer

Inherent risk is associated with the uni

Question 13

Define the management assertions of: existence or occurrence, completeness, rights and obligations, valuation or allocation, presentation and disclosure.

Accepted Answer

The existence or occurrence assertion af

Question 14

The fundamental difference between internal and external auditing is that

Accepted Answer

A)  internal auditors represent the interests of the organization and external auditors represent outsiders 
B)  internal auditors perform IT audits and external auditors perform financial statement audits 
C)  internal auditors focus on financial statement audits and external auditors focus on operational audits and financial statement audits 
D)  external auditors assist internal auditors but internal auditors cannot assist external auditors 
A)  internal auditors represent the interests of the organization and external auditors represent outsiders 
B)  internal auditors perform IT audits and external auditors perform financial statement audits 
C)  internal auditors focus on financial statement audits and external auditors focus on operational audits and financial statement audits 
D)  external auditors assist internal auditors but internal auditors cannot assist external auditors

Question 15

Use the internal control procedures listed below to complete statements.
 $\begin{array}{lccc}
\text { segregation of duties} &  \text { specitic authorization}\
\text { general authorization} & \text { accounting records}\
\text { access controls} & \text { independent verification.}\
\text { supervision}\
\end{array}$

-Not permitting the computer programmer to enter the computer room is an example of _______________________________.

Accepted Answer

segregatio

Question 16

Management can expect various benefits to follow from implementing a system of strong internal control. Which of the following benefits is least likely to occur?

Accepted Answer

A)  reduced cost of an external audit. 
B)  prevents employee collusion to commit fraud. 
C)  availability of reliable data for decision-making purposes. 
D)  some assurance of compliance with the Foreign Corrupt Practices Act of 1977. 
E)  some assurance that important documents and records are protected. 
A)  reduced cost of an external audit. 
B)  prevents employee collusion to commit fraud. 
C)  availability of reliable data for decision-making purposes. 
D)  some assurance of compliance with the Foreign Corrupt Practices Act of 1977. 
E)  some assurance that important documents and records are protected.

Question 17

The text describes six internal control activities. List four of them and provide a specific example of each one.

Accepted Answer

None

Question 18

What are the five internal control components described in the COSO framework

Accepted Answer

the control environment, risk

Question 19

Use the internal control procedures listed below to complete statements.
 $\begin{array}{lccc}
\text { segregation of duties} &  \text { specitic authorization}\
\text { general authorization} & \text { accounting records}\
\text { access controls} & \text { independent verification.}\
\text { supervision}\
\end{array}$

-Approving a price reduction because goods are damaged is an example of __________________________.

Accepted Answer

specific a

Question 20

An accounting system that maintains an adequate audit trail is implementing which internal control procedure?

Accepted Answer

A)  access controls 
B)  segregation of functions 
C)  independent verification 
D)  accounting records 
A)  access controls 
B)  segregation of functions 
C)  independent verification 
D)  accounting records

When duties cannot be segregated, the most important internal control procedure is

When planning the audit, information is gathered by all of the following methods except

What are the key points of the section 404 of the Sarbanes-Oxley Act?

Control activities under SAS 109/COSO include

Define and contrast attestation services and advisory services.

The board of directors consists entirely of personal friends of the chief executive officer. This indicates a weakness in

Preventive controls are passive techniques designed to reduce fraud.

Which of the following is true?

Use the internal control procedures listed below to complete statements. segregation of duties specitic authorization general authorization accounting records access controls independent verification. supervision -Sequentially numbering all sales invoices is an example of __________________________.

Distinguish between errors and irregularities. Which do you think concern the auditors the most?

What are the components of audit risk?

Define the management assertions of: existence or occurrence, completeness, rights and obligations, valuation or allocation, presentation and disclosure.

The fundamental difference between internal and external auditing is that

Management can expect various benefits to follow from implementing a system of strong internal control. Which of the following benefits is least likely to occur?

The text describes six internal control activities. List four of them and provide a specific example of each one.

What are the five internal control components described in the COSO framework

An accounting system that maintains an adequate audit trail is implementing which internal control procedure?

Auditing IT Governance Controls

Auditing Operating Systems and Networks

Auditing Database Systems

Systems Development and Program Change Activities

Transaction Processing and Financial Reporting Systems Overview

Computer Assisted Audit Tools and Techniques

Data Structures and Caatts for Data Extraction

Auditing the Revenue Cycle

Auditing the Expenditure Cycle

Enterprise Resource Planning Systems

Business Ethics, Fraud, and Fraud Detection

Filters

Exam 1: Auditing and Internal Control

When duties cannot be segregated, the most important internal control procedure is

When planning the audit, information is gathered by all of the following methods except

What are the key points of the section 404 of the Sarbanes-Oxley Act?

Control activities under SAS 109/COSO include

Define and contrast attestation services and advisory services.

The board of directors consists entirely of personal friends of the chief executive officer. This indicates a weakness in

Preventive controls are passive techniques designed to reduce fraud.

Which of the following is true?

Distinguish between errors and irregularities. Which do you think concern the auditors the most?

What are the components of audit risk?

Define the management assertions of: existence or occurrence, completeness, rights and obligations, valuation or allocation, presentation and disclosure.

The fundamental difference between internal and external auditing is that

Management can expect various benefits to follow from implementing a system of strong internal control. Which of the following benefits is least likely to occur?

The text describes six internal control activities. List four of them and provide a specific example of each one.

What are the five internal control components described in the COSO framework

An accounting system that maintains an adequate audit trail is implementing which internal control procedure?

Auditing IT Governance Controls

Auditing Operating Systems and Networks

Auditing Database Systems

Systems Development and Program Change Activities

Transaction Processing and Financial Reporting Systems Overview

Computer Assisted Audit Tools and Techniques

Data Structures and Caatts for Data Extraction

Auditing the Revenue Cycle

Auditing the Expenditure Cycle

Enterprise Resource Planning Systems

Business Ethics, Fraud, and Fraud Detection

Filters