External financial statement auditors must obtain

20) External financial statement auditors must obtain evidence regarding what attributes of an
internal audit (IA) department if the external auditors intend to rely on IA's work?
A) integrity
B) objectivity
C) competence
D) all of the above
Answer: D
21) To obtain an understanding of an entity's control environment, an auditor should concentrate
on the substance of management's policies and procedures rather than their form because
A
22) The ________ is helpful in preventing classification errors if it accurately describes which
type of transaction should be in each account.
D
30) Control activities are a subcomponent of the information and communication component of

internal control.
31) Adequate documents and records is a subcomponent of the control environment.
32) The chart of accounts is helpful in preventing classification errors if it accurately describes
which type of transaction should be in each account.
33) Auditing standards prohibit reliance on the work of internal auditors due to the lack of
independence of the internal auditors.
34) If an auditor wishes to rely on the work of internal auditors (IA), the auditor must obtain
satisfactory evidence related to the IA's competence, integrity, and objectivity.
35) An example of a specific authorization is management setting a policy authorizing the
ordering of inventory when less than a one-week supply is on hand.
36) Personnel responsible for performing internal verification procedures must be independent of
those originally responsible for preparing the data.
11.4 Learning Objective 11-4
1) Old and new systems operating simultaneously in all locations is a test approach known as
2) Which of the following is a component of general controls?
C