Modified True / False. The following statements in this section may be true or false. If the statement is "true", please indicate that in the space provided. If the statement is false, write "false" in the space provided, and correct the statement, so that it is true.

_______ 1. Internal control is a process, effected by the entity's board of directors, management, and other personnel, designated to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance.

_______2. Among the basic principles of the control environment is to insure that the entity does not waste money.

_______3. In performing effective risk assessment, organizations should only put funds in investment grade securities.

_______4. Control activities are policies and procedures that may include avoiding the use of outside consultants.

_______5. A fidelity bond is a way of mitigating losses from dishonest employees.

_______6. One way to control cash receipts is to have one person opening up the mail when checks are sent, and a separate person depositing the checks.

_______7. In considering the relationship of revenue accounts to balance sheet accounts, it might be said that income statement accounts are temporary.

_______8. One of the main reasons that payroll fraud persists is because of digital technology.

_______9. Once an auditor completes the fieldwork, as of the balance sheet date, he is no longer responsible for reporting on subsequent events.

______10. An auditor need not be concerned about the contents of management's annual report to stockholders since it is not an audit firm document.