ch05 - ch05 Student 1 The primary reason for evaluating a company's internal control is to provide a basis for communicating significant deficiencies

ch05 - ch05 Student 1 The primary reason for evaluating a...

This preview shows page 1 - 3 out of 23 pages.

ch05Student: ___________________________________________________________________________1.The primary reason for evaluating a company's internal control is to provide a basis for communicating significant deficiencies. True False2.The audit task of control risk assessment involves learning what the company does to prevent, detect, and correct errors and fraud. True False3.The audit team is responsible for the client's internal control. True False4.The attitudes of managers and directors are probably the most pervasive influences on the control environment. True False5.The most important feature of an internal control system is the people who make the system work. True False6.A control activity is an action taken to prevent, detect, and correct errors and frauds in transactions. True False7.The COSO report indicates that internal control should be considered a process, not an end in itself. True False8.Auditors of public companies do not need to determine the quality of a client's internal control; they need to know only enough to plan the audit work. True False9.The primary reason to evaluate internal control is to formulate constructive suggestions for improvement. True False10.The most efficient means of gathering evidence about a client's internal control is to prepare a flowchart of the system. True False11.The strengths and weaknesses of a control system should be documented in bridge workpapers connecting the control evaluation to subsequent audit procedures. True False12.Auditors do not need to perform tests of controls on internal control activities that are evaluated as weak just to prove the weaknesses actually exist. True False13.To reduce the final control risk assessment to a low level, auditors need to determine only the required degree of compliance with the control policies and procedures. True False14.Auditors perform tests of control activities to determine how the company's controls actually functioned during the period under audit. True False
Background image
15.Control systems generally provide absolute assurance that the objectives of internal control are satisfied. True False16.Dual-purpose audit tests are procedures that produce both control and substantive evidence. True False17.The key person in the internal control system of a small business is the independent auditor. True False18.Evaluation of internal control systems on a nonpublic entity should not be subject to cost-benefit considerations. True False19.Tests of controls consist of procedures designed to produce evidence regarding how effectively the client's controls work in practice. True False20.Auditors can stop the assessment of control risk for nonpublic entities for either effectiveness or efficiency reasons. True False21.PCAOB Auditing Standard No.5 only applies to public companies.
Background image
Image of page 3

You've reached the end of your free preview.

Want to read all 23 pages?

  • Spring '12
  • janigrt

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes