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What is the difference between a significant deficiency and a material weakness as it relates to internal control? How does the presence of one material deficiency affect the auditor's report on internal controls under the PCAOB standards? Likewise, how does a material weakness impact the auditor's report on internal controls under the PCAOB standards?

One objective of an audit of a water utility for a small city is to determine whether all customers are being billed. Select the best direction of testing from the options below and explain why you selected that option.

(a)Meter department records to the sales register

(b)Sales register to the meter department records.

(c)Accounts receivable ledger to the sales register

(d)Sales register to the accounts receivable ledger

Utilizing the auditing through the computer approach, explain what types of procedures you would perform as an auditor in evaluating an online order processing system. Name a control that could compensate for inadequate segregation of duties in a computer system.

When considering the use of management's written representations as audit evidence about the completeness of an assertion, an auditor should understand that such representations

(Select one of the answers that best completes this sentence and explain your response.)

(a)constitute sufficient evidence to support the assertion when considered in combination with a sufficiently low assessed level of control risk.

(b) complement, but do not replace, substantive tests designed to support the assertion.

(c)are not part of the evidence considered to support the assertion.

(d)replace a low assessed level of control risk as evidence to support the assertion.