Exam 11: Internal Control and Coso Framework

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?

Discuss what is meant by the term "control environment" and identify four control environment subcomponents that the auditor should consider.

A ________ is responsible for controlling the use of computer programs, transaction files and other computer records and documentation and releases them to the operators only when authorized.

To promote operational efficiency, the internal audit department would ideally report to

Which of the following best describes the purpose of control activities?

The auditor is always concerned with their audit client's controls that affect the efficiency and the effectiveness of company operations, as these controls will always influence the fair presentation of the financial statements.

Auditing standards prohibit reliance on the work of internal auditors due to the lack of independence of the internal auditors.

Which of the following is an accurate statement regarding the auditor's responsibility for understanding internal control?

A large portion of errors in IT systems result from data entry errors.

Digital signatures are used by individuals and companies engaged in e-commerce to guarantee the integrity and the authenticity of transactions or agreements executed between parties.

Under the Dodd-Frank federal financial reform legislation, all public companies are required to obtain an audit report on internal control over financial reporting.

Which of the following controls prevent and detect errors while transaction data are processed?

It is important for the CPA to consider the competence of the clients' personnel because their competence has a direct impact upon the

The most important output control is

Management's report on internal controls must identify the framework used to evaluate the effectiveness of internal controls, and this framework may include other internal control frameworks which exist around the world.

Describe each of the three broad objectives management typically has for internal control. With which of these objectives is the auditor primarily concerned?

A system of internal controls consisting of policies and procedures are designed to provide management with reasonable assurance that the company can achieve its goals and objectives.

Which of the following best describes an entity's accounting information and communication system?

Section 404 of the Sarbanes-Oxley Act requires that both private and public companies issue an internal control report.

Management's identification and analysis of risk is an ongoing process and is a critical component of effective internal control. An important first step is for management to identify factors that may increase risk. Identify at least five factors, observable by management, which may lead to increased risk in a typical business organization.