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During the review of a small business clients

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10. During the review of a small business client's internalcontrol system, the auditor discovered that the accountsreceivable clerk approves credit memos and has access tocash.Which of the following controls would be mosteffective in offsetting this weakness?a.The owner reviews errors in billings to customers andpostings to the subsidiary ledger.b.The controller receives the monthly bank statementdirectly and reconciles the checking accounts.c.The owner reviews credit memos after they arerecorded.d.The controller reconciles the total of the detailaccounts receivable accounts to the amount shown inthe ledger.
11. Which of the following, if material, would be consideredfraud?
12. Competence of personnel is necessary to proper recording oftransactions and supports financial statements that arefairly presented.In reviewing the organization fornecessary competence, which of the following job typeswould be of least interest to the auditor?
GOVERNANCE, BUSINESS ETHICS, RISK MANAGEMENT, & INTERNAL CONTROL13. An auditor would consider internal control proceduresrelating to a client's payroll procedures to be ineffectiveif the payroll department supervisor is responsible for
14. Which of the following is the most effective controlprocedure to detect vouchers that were prepared for thepayment of goods that were not received?a.Count goods upon receipt in storeroom.b.Match purchase order, receiving report, and vendor'sinvoice for each voucher in accounts payabledepartment.c.Compare goods received with goods requisitioned inreceiving department.d.Verify vouchers for accuracy and approval in internalaudit department.

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