Exam 18: Integrated Audits of Public Companies

Consider a company whose sales are initiated by customers either through the Internet,or in a retail store.Which of the following is correct?

Tests of operating effectiveness ordinarily include reperformance of the application of controls.

Which of the following would most likely be included in a SEC 10K filing in which a material weakness in internal control exists? Financial Statement: Internal Control Audit Report Audit Report A) Unqualified Adverse B) Unqualified Qualified C) Qualified Qualified D) Adverse Unqualified

Which is least likely to be a question asked of employee personnel during a walkthrough?

A control deficiency that is less than a significant deficiency is most likely to result in what form of audit opinion on internal control?

A material weakness that exists at year end will result in what type of audit report on internal control?

According to PCAOB standards for reporting on internal control,calculating depreciation expense or adjusting for foreign currencies is referred to as:

Walkthroughs provide the auditors with evidence to: Confirm their understanding effectiveness of controls Substantiate account balances A) Yes Yes B) Yes No C) No Yes D) No No

Which of the following is most likely to be considered a material weakness in internal control?

The existence of a material weakness led to an adverse opinion in the internal control audit report of a publicly traded company.Which of the following statements is correct if management believes that it has remediated the weakness?

The framework most likely to be used by the client in its internal control assessment is the:

An auditor identified a significant deficiency in internal control in December.The client was informed and the client corrected the significant deficiency shortly before year-end (December 31); the auditor agrees that the correction eliminates the significant deficiency as of December 31.The appropriate audit report on internal control under a PCAOB Standard No.2 audit of internal control is:

The "as of date" for internal control reporting is ordinarily the last day of the fiscal year.

The Sarbanes-Oxley Act changed auditor association with a client's internal control from the review to the audit form of association.

The minimum likelihood of loss involved in the consideration of a control deficiency that is less than a significant deficiency is:

Section 404 of the Sarbanes-Oxley Act of 2002 includes internal control reporting requirements for both management and auditors.

A circumstance caused scope limitation in a Sarbanes/Oxley 404 internal control audit is most likely to result in a(n):

The minimum likelihood of loss involved in the consideration of a possible material weakness is:

An auditor's report on internal control ordinarily includes negative assurance on the effectiveness of internal control.

Under a PCAOB standards for an internal control audit,which of the following is least likely to indicate a significant deficiency relating to a client's antifraud programs?