Practice Quiz 2

Topics: Auditing, Audit, Internal control Pages: 3 (464 words) Published: January 21, 2015
Question 1
1. Smaller entities are best able to overcome their absence of safeguards by:
implementing a strict segregation of duties policy

creating an audit committee

removing authority from the owner/manager

developing a culture that emphasizes integrity, ethical values and competence 1 points   
Question 2
1. An auditor will use the test data method in order to gain certain assurances with respect to the Ð

input data

machine capacity

procedures contained within the program

degree of keying accurach
1 points   
Question 3
1. ASA 315.A51 (ISA 315.A51) Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and its Environment includes all of the following as components of internal control except:

control environment

risk assessment

information system

legal environment
1 points   
Question 4
1. Which of the following is NOT correct about factors relevant to the auditor's judgement about whether a control, individually, or in combination with others, is relevant to the audit?


size of the entity

diverse and complex operations

the governing board is greater than 5
1 points   
Question 5
1. Purchase orders become part of the transaction trail of documentary evidence that directly supports which assertion for purchase transactions?

existence and occurrence

rights and obligations

accuracy and valuation

presentation and disclosure
1 points   
Question 6
1. IT poses specific risks to an entity's internal control, including:

Reliance on systems or programs that are inaccurately processing data

Reliance on systems or programs that are processing inaccurate data

Unauthorised access to data may result in destruction of data or improper changes to data

all of the above
1 points   
Question 7
1. Which of these is not an inherent limitation of an internal control...
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