12). Are any of the following an example of a test of controls? Recalculation of depreciation by the auditor 2. 1. Test counts made by the auditor during an inventory count 3. Inspection of sales invoices to confirm details correct in sales day book. A. 1 only B. 2 only C. 1, 2 and 3 D. None of the above 13) Financial statement manipulation risk is arguably present for all companies' financial statements. Under which of the following circumstances is that risk higher? A. If the company is heavily regulated. B. If the company has low amounts of debt C. If the company has to make significant judgments for accounting estimates. D. If the company operates in stable economic environments. 14) Which of the following procedures would an auditor not use to assess the operating effectiveness of internal controls? A. Make inquiries of appropriate client personnel. B. Examine documents, records, and reports. C. Re-perform client procedures D. Inspect design documents. 15) Qualitative factors can affect an auditor's assessment of materiality. Is either of the following statements true? 1. Misstatements that are otherwise immaterial may be material when aggregated with other immaterial misstatements. 2. Misstatements that are financially immaterial may be material by virtue of their nature A) 1 only B) 2 only C) 1 and 2 D) Neither 1 nor 2