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Unformatted text preview: 110. Which of the following organizational changes may have a significant impact on risks and controls? a. Change in external auditing firms. b. Change in banking institutions. c. New or revised information systems. d. Plant expansion. e. None of the above. 111. According to the COSO model of control, each of the following is a component integrated with the management process except: a. Monitoring. b. Information and communication. c. Rationalization. d. Risk assessment. e. None of the above. 112. Implementing a code of ethics is a Sarbanes‐Oxley requirement related to which component of the management process? a. Control activities. b. Information/communication. c. Control environment. d. Monitoring. e. None of the above. 113. SAS No. 99 states that the auditor has the responsibility to plan and perform the audit to obtain reasonable assurance about whether financial statements are free of material misstatement, whether caused by error or fraud. SAS No. 99 also requires all of the following except: a. Obtaining the information needed to identify risks of material misstatement due to fraud. b. Preparation of a fraud prevention plan. c. Description and characteristics of fraud. d. Importance of exercising professional skepticism. e. None of the above. 114. Horizontal analysis typically involves what? a. Comparison of companies by market share in the industry. b. Comparison of cash value at a predictable moment in liquidity. c. Comparison of year‐to‐year changes in financial statements. d. Comparison of organizational structure best suited for a planned business venture. e. Both a and b. 115. Which type of auditor opinion is probably the most common? a. Unqualified. b. Unqualified with explanation. c. Qualified. Page 24 of 44 ...
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- Summer '10