1. A commitment to competence to plant personnel is important to ensure that the ______ process is both effective and efficient

a. Manufacturing

b. Governance

c. Management

d. Analysis

e. Audit

2. Purchasing and cash disbursements can provide lots of opportunity for ______ by employees

a. Confusion

b. Governance

c. Fraud

d. Confirmations

e. Audits

3. If purchasing employees are _______ they may negotiate bad purchases or purchases terms for the company

a. Promoted

b. Incompetent

c. Evaluated

d. Empowered

e. Competent

4. If purchasing agents accept ______ the entire purchasing cycle is compromised

a. Bonuses

b. Advice

c. Kickbacks

d. Encouragement

e. Pay increases

5. Levels of authority in the manufacturing process need to be clearly ______

a. Decreased

b. Compromised

c. Noted

d. Communicated

e. Increased

6. Inventories are often a large _______ asset of a companys balance sheet

a. Contra

b. Current

c. Negative

d. Long-term

e. Liability

7. The accounting profession allows various methods for the _______ of inventory

a. Valuation

b. Protection

c. Theft

d. Quality

e. Manufacturing

8. The determination of the value of ending inventory _______ affects net income

a. Often

b. Possibly

c. Indirectly

d. Never

e. Directly

9. When testing controls around inventory, auditors are considering the ______ transaction cycle

a. Purchasing

b. Payroll

c. Disbursements

d. Cash

e. Accounts receivables

10. An important step of testing controls is comparing quantity and _______ in the invoice, purchase order, and receiving report

a. Markup

b. Returns

c. Price

d. Quality

e. Markdown

11. Inventories with a high risk of ________ may be warranted as a significant risk

a. Control

b. Immateriality

c. Effectiveness

d. Insignificance

e. Obsolescence

12. Purchasing and cash disbursements can provide opportunity for _____ by employees

a. Confirmations

b. Governance

c. Audits

d. Confusion

e. Fraud

13. _____ considering information about the client and its environment, the auditor must assess the risk of material misstatements related to assertions about inventory

a. Instead of

b. While

c. Before

d. After

e. despite

14. Audit procedures for consignment inventory could include a comparison of the physical inventory with the clients ______

a. Budget

b. Internal controls

c. Projection

d. Records

e. Sample size

15. Tests help identify the _____ of controls help to evaluate the clients internal control procedure

a. Effectiveness

b. Idea

c. Need

d. Creation

e. intent