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l. Which of the following procedures would provide the best evidence of the effectiveness of a credit-granting function?1. Observe the process.2. Review the trend in receivables writeoffs.3. Ask the credit manager about the effectiveness of the function.4. Check for evidence of credit approval on a sample of customer orders.m. Which of the following is not something all levels of employees should do?n. Which of the following statements does not illustrate the concept of inherent business risk?
o. Internal auditors obtain an understanding of controls and perform tests of controls to:1. Detect material misstatements in account balances2. Reduce control risk to an acceptable level3. Evaluate the design adequacy and operating effectiveness of the controls– Q5 MC page 12-164. Assess the inherent risks associated with transactionsp. In an internal auditor’s evaluation of internal control design indicates that the controls are designed adequately, the appropriate next step would be to:1. Test the operating effectiveness of the controls– Q6 MC page 12-162. Prepare a flowchart depicting the system of internal controls3. Conclude that residual risk is low4. Conclude that control risk is highq. Internal auditors sometimes express opinions in addition to stating observations in their reports. Due professional care requires that internal audit opinions be:1. Based on sufficient appropriate evidence– Q8 MC page 12-162. Limited to the effectiveness of internal controls3. Expressed only when requested by management or the audit committee4. Based on experience and free from errors in judgementr. Which of the following is not likely to be an assurance engagement objective?