1. Transactions need to be classified appropriately. This internal control objective relates to all of the following assertions EXCEPT for

accuracy.

allocation.

valuation.

completeness.

2. Which of the following would NOT be used by the auditor when determining which internal control deficiencies should be communicated to management?

professional scepticism

determination of the significance of the weakness

consultation with other audit team members

professional judgement

3. The risk that an auditor expresses an inappropriate audit opinion when the financial statements are materially misstated is defined as

audit risk.

inherent risk.

business risk.

detection risk.

4. Which of the following accurately describes a checklist or preformatted questionnaire?

involves the auditor summarizing in boxes each step of the flow of transaction from start to finish

highlights key activities from initiation to reporting as well as describing what happens in the flow of transactions

involves the auditor describing in words each step of the flow of transaction from start to finish

systematically identifies the most common types of internal control procedures that should be present

5. Which of the following accurately describes the narrative form of documentation?

highlights key activities from initiation to reporting as well as describing what happens in the flow of transactions

involves the auditor describing in words each step of the flow of transaction from start to finish

involves the auditor summarizing in boxes each step of the flow of transaction from start to finish

systematically identifies the most common types of internal control procedures that should be present

6. After controls have been tested, the auditors next step is to

document the work.

create an audit plan.

perform substantive testing.

form an audit opinion.

7. Which of the following is NOT specifically addressed by internal control objectives?

amount of inventory recorded

recording of cash receipts

disclosure in the statements

timing of revenue recognition entries