chapter 5 test solutions only

chapter 5 test solutions only - Chapter 05 - Risk...

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Chapter 05 - Risk Assessment: Internal Control Evaluation Chapter 05 Risk Assessment: Internal Control Evaluation 1. An audit team's responsibility would not include A. Designing client's internal controls. 2. The appropriate separation of duties does not include D. Data preparation. 3. A set of characteristics that helps to define a seriousness about employees' attitudes about the control activities in a company is referred to as B. The control environment. 4. Control activities intended to ensure that transactions are recorded in the right period are designed to achieve the ASB assertion of D. Cutoff. 5. Sound internal control can described as separating all of the following duties and responsibilities except for D. Hiring of employees. 6. After obtaining an understanding of the entity's internal control and assessing control risk, an auditor of a non public company decided not to perform additional tests of controls. The auditor most likely concluded that the A. Additional evidence to support a further reduction in control risk was not cost beneficial. 7. Regardless of the assessed level of control risk, an auditor of a non public company would perform some C. Substantive tests to restrict detection risk for significant transaction classes. 8. The "obtaining an understanding" work phase (Phase 1) of internal control evaluation would not give auditors an overall acquaintance with the client's C. Control activity effectiveness. 9. Which of the following is an Information Technology General Control? D. Separation of duties in the IT department. 10. Control strengths and weaknesses should be documented in audit documentation, sometimes called B. Bridge working papers. 11. The internal control in small business is highly dependent on the 5-1
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Chapter 05 - Risk Assessment: Internal Control Evaluation C. Owner-manager's competence, ethics and integrity. 12. Which of the following is not an input control activity? A. Reasonableness tests. 13. A sales clerk enters a customer's six-number customer account. The computer program uses the first five numbers to calculate a sixth number. This resulting number is then compared to the sixth number entered by the sales clerk. This is an example of a D. Check digit. 14. Which of the following is the least important audit reason for the auditor's obtaining an understanding of a company's internal control? A. To serve as a basis for constructive suggestions. 15. Tracing bills of lading to sales invoices provides evidence that A. Shipments to customers were invoiced. 16. Which of the following client internal control activities is not usually performed in the treasurer's department? C. Approving vendors' invoices for payment. 17. Which of the following audit procedures most likely would provide an auditor with
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chapter 5 test solutions only - Chapter 05 - Risk...

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