II. Completion (20 points, 1 point for each blank space) The sentences below are incomplete. A space is provided where some word(s) may be missing. Complete the sentences, so that they are correct statements. 1.Experience has shown that many undetected misstatements in the financial statements are rather then intentional errors. 2. A real estate company owns and manages its own properties. As an auditor, verifying the rights to those properties would include examining copies of 3. In a public company, an auditor following the rules of the PCAOB would audit both the financial statements and 4. An auditor ought to communicate internal control deficiencies to those that are responsible for taking corrective action. Those persons would include 5. A document that is part of an internal control voucher system, but is strictly used internally within the company is the 6. A legal defense used by banks to limit their liability in the situation involving a forgery that is improperly paid by the bank is called 7. Accountants generally agree that, function of accounting. 8.The most important control over payroll is is the most important single 9. One way for an auditor to document the intent of the governing board's decisions is to review and collect 10. There are two types of subsequent events of concem to the auditor. They include and 11. Both revenue accounts and expense accounts share a relationship with the 12. There are three reasons that explain why payroll frauds are increasingly difficult to conceal They include: and 13. The sub-committee which includes members of the governing board, and is also responsible for the handling the relationship with the auditors is the 14. One way for auditors to gain an understanding of the client includes 15. risk is the risk that an auditor will express an inappropriate audit opinion when the financial statements are materially misstated. 16. is a form of insurance in which a bonding company agrees to reimburse an employer, within limits, for losses attributable to theft or embezzlement by bonded employees. 17. A is a diagram-a symbolic representation of a system, or a series of procedures with each procedure shown in sequence.