AUDITING - CHAPTERS 10 - 14 - AUDITING 1 For an internal...

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AUDITING - CHAPTERS 10 - 14 1. For an internal audit function to be effective, it is essential that the internal audit staff a.be independent of the operating departments. b. be independent of the accounting department. c.report directly to a high level of authority within the organization. d. achieve all of the above. 2. If evidence was obtained in the prior year's audit that indicates a key control was operating effectively, 3. Internal controls can never be regarded as completely effective. Even if systems personnel could design an ideal system, its effectiveness depends on the a.adequacy of the computer system. b. proper implementation by management. c.ability of the internal audit staff to maintain it. d. competency and dependability of the people using it. 4. Which of the following is not a control related to safeguarding IT equipment, programs, and data files? 5 . Which of the following tests would not be a program control? 6. It is important for the CPA to consider the competence of the audit clients' employees because their competence bears directly and importantly upon the a.cost/benefit relationship of the system of internal control. b. achievement of the objectives of the system of internal control. c.comparison of recorded accountability with assets. d. timing of the tests to be performed. 7. The Foreign Corrupt Practices Act of 1977 8. The procedures for proper recordkeeping should be spelled out in 9. An auditor's attempt to gain an understanding of the accounting system is typically accomplished and documented by
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10 . Control risk is a measure of the auditor's expectation that the internal controls a.will prevent material misstatements from occurring. b. will detect and correct material misstatements. c.will either prevent material misstatements or detect and correct them. d. will neither prevent material misstatements nor detect and correct them.
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