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iChapter 1—Auditing and Internal ControlTRUE/FALSE1.Corporate management (including the CEO) must certify monthly and annually their organization’s internal controls over financial reporting.PTS:12.Both the SEC and the PCAOB require management to use the COBIT framework for assessing internal control adequacy.PTS:13.Both the SEC and the PCAOB require management to use the COSO framework for assessing internal control adequacy.PTS:14.A qualified opinion on management’s assessment of internal controls over the financial reporting system necessitates a qualified opinion on the financial statements?PTS:15.The same internal control objectives apply to manual and computer-based information systems.PTS:16.The external auditor is responsible for establishing and maintaining the internal control system.PTS:17.Segregation of duties is an example of an internal control procedure.PTS:18.Preventive controls are passive techniques designed to reduce fraud.PTS:19. A key modifying assumption in internal control is that the internal control systemis the responsibility of management.PTS:1
10.While the Sarbanes-Oxley Act prohibits auditors from providing non-accounting services to their audit clients, they are not prohibited from performing such services for non-audit clients or privately held companies.PTS:111.The Sarbanes-Oxley Act requires the audit committee to hire and oversee the external auditors.PTS:112.Section 404 requires that corporate management (including the CEO) certify their organization’s internal controls on a quarterly and annual basis.PTS:113.Section 302 requires the management of public companies to assess and formally report on the effectiveness of their organization’s internal controls.PTS:114.Application controls apply to a wide range of exposures that threaten the integrity of all programs processed within the computer environment.PTS:115.Advisory services is an emerging field that goes beyond the auditor’s traditional attestation function.PTS:116.An IT auditor expresses an opinion on the fairness of the financial statements.PTS:117.External auditing is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization.PTS:118.External auditors can cooperate with and use evidence gathered by internal audit departments that are organizationally independent and that report to the Audit Committee of the Board of Directors.PTS:119.Tests of controls determine whether the database contents fairly reflect the organization's transactions.PTS:1
20.Audit risk is the probability that the auditor will render an unqualified opinion on financial statements that are materially misstated.