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I need help with my auditing quiz. Please see attachment! Quiz #2 Name: ______________________________________________________________ Date: _______________________________________________________________ 1. How should the auditor document his/her understanding of
I need help with my auditing quiz. Please see attachment!
Quiz #2 Name: ______________________________________________________________ Date: _______________________________________________________________ 1. How should the auditor document his/her understanding of internal controls? A. Narrative B. Flowcharts C. Internal Control Questionnaires D. All the above 2. For example, reviewing the entity's bank reconciliation could be a test of entity personnel's performance of periodic reconciliations of the cash account (a test of controls); the auditor's reconciliation at year-end would be a substantive test of: A. Completeness B. Valuation/ Allocation C. Accuracy/Existence D. Rights/Obligations 3. Control environment include all except: A. Commitment to competence B. Performance review C. Human resource policies and practices D. Organizational structure 4. Which of the following is not a component of an entity's internal control A. Control activities B. Control risk C. Risk assessment D. Information and communication 5. Management is responsible for the establishment and maintenance of internal controls. They want reasonable assurance that internal controls are achieving certain objectives A. Accurate and reliable financial reporting B. Compliance with laws and regulations C. Effectiveness and efficiency of operations D. All of the above 6. In assessing control risk, an auditor selects from a variety of techniques, including A. Inquiry and recalculation B. Reperformance and observation C. Comparison and confirmation D. Inspection and verification 7. Good internal controls include upon receiving checks from customers by mail, a responsible employee should A. Add the checks to the daily cash summary B. Verify that check is supported by prenumbered sales invoices C. Prepare a duplicate listing of checks received D. Record the checks in the cash receipts journal 8. An auditor would analyze inventory turnover rates to obtain evidence regarding management assertions about A. Existence B. Rights C. Presentation D. Valuation 9. In auditing accounts receivable, the negative form of confirmations request is used when A. Response rate to positive confirmation request were low B. The total amount of account receivable is immaterial to the financial statement taken as a whole C. Recipients are likely to return positive confirmation without verifying the information D. The combined assessed level of both inherent risk and control risk relative to account receivable is low 10. The refusal of a client's attorney to provide information requested in an inquiry letter is considered A. Reasons for adverse opinion B. A limitation on the scope of the audit C. Grounds to withdraw from the engagement D. Equal to a significant deficiencyStep by Step Solution
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