obtaining an First auditor decided not to perform tests of controls for purposes A. The available evidential matter obtained darough tes control risk of the internal control structure and esing cantrol risk of an eatity.n decided ha most liknly on in the assessed level of control risk a juastified for certain in BA reducti of controls would not support an increased C. It would be inefficient to perforn tests of controls that would result ina tests. controls that would result in a reduction in planned substantive D. The assessed level of inherent risk exceeded the assessed level of l control risk 12. In a properly designed internal control system ss of eustiomer permitied to may be the same write-offs of customer accounts A. Receive and deposit checks, and also approve B. Approve vouchers for payment, and also sign chocks. e C Reconcile the bank statements, and also receive and deposit cash. co D. Sign chocks, and also cancel supporting documents. dhe rol 13. A field test is a A. Test to ensure that a numerical value in a ficld does not exceed some predetermined value, B. A check to ensure that the value in a field falls within an allowable range of values C. A check to ensure that the data in a field have the proper arithmetic sign. D. A check on a fieid to ensure that it contains either all numeric or alphabetic characters. 14. Assessing control risk below maximum involves all of the following except A. Identifying specific controls to rly on. B. Concluding that controls are ineffective. C. Performing tests of controls. D. Analyzing the achieved level of control risk after performing tests of controls. 15. When communicating internal control-related matters noted in an audit of a nonissuer, an and issued on significant deficiencies should indicate that A. Errors or fraud may occur and not be detected because there are inherent limitations in any in system. B. The issuance of an unqualified opinion on the financial statements may depend on correctiw action. C. The deficiencies noted were not detected within a timely period by employees in the norma performing their assigned functions. D. The purpose of the audit was to report on the financial statements and not to provide assu control pen an audior tests a computerized accounting systom, which of the following is true of the test data t data are processed by the clients computerprograms under the aaditod's control. . Test data must consist of all possible valid I invalid conditions. C. Testing a program at year end provides assurance that the client's processing was accurate for D. Several transactions of each type must be tested. for the full year. 81. An auditor will use the I'T test data method in order to gain certain e A. Input data. B. Machine capacity C. Procedures contained within the program D. Degree of keypunching accuracy assuranoes with respect to the 82. Which of the following is not true? A. The auditor should not communicate with management until the audit of internal control over financial reporting is finished. B. Written communication between the auditor and management about intermal should include the definitions of control deficiencies, significant deficiencies, C. The auditor should not include in the noted duringaudit of internal control over financial reporting. D. If fraud is discovered, the auditor must report it to the appropriate l control over financial report written report representations that no significant deficiencies were level of management 83. In order for an external auditor to complete an audit of a publily traded entity, the entity's managen must comply with all of the following except: t of a publicly traded entity ty for the effectiveness of the entity's internal control over financial reporting. B. Evaluate the effectiveness of the entity's intemal control over financial reporting using suitable cont criteria. C. Support its evaluation with sufficient evidence, inchuding documentation. D. Present an oral assessment of the effoctiveness of the entity's internal control over financial reportin the end of the entity's most recent fiscal year. financial re 84. According to the PCAOB, who is responsible for designing the intemal controls over S process of an entity? A. the entity's CEO and/or CFO. B. the entity's board of directors. C. an internal control specialist. D. the external auditor. UIO A. Documentation regarding the auditor's evaluation of internal controls regarding the safeguarding of assets. an regarding management's testing anid evaluation of the controls. C. D 65. Management documentation should include all of the f on the controls designed in all five components of intemal control. repo 66. The Sarbanes-Oxley Act via: A. Management statements in the annual report B. A special quarterly filing from management. C. A footnote to the auditor's report. requires reporting on the effectiveness of internal control over financial D. A direct letter to the SEC signed by management and the auditor. 67. The auditor is least likely to use generalized audit software to A. Perform analytical procedures on the client's data. B. Access information stored on the client's IT files. C. Identify weaknesses in the client's IT controls. D. Test the accuracy of the client's computations. 68. AAA Accounting recently finished auditing LinktheEarth Corporation's internal control over finan reporting. AAA found a number of material weaknesses in the company's internal control structure. LinktheEarth's management fixed all of the weaknesses that AAA found. However, the auditors did no sufficient time to retest the controls. What report should AAA issue with regards to internal control ov financial reporting? A. Unqualified report. B. Adverse report. C. Qualified report. D. Disclaimer on opinion. 69. Which ofthe following is not a primary objective of internal control as established by coSO? A. Efficiency and effectiveness of operations. B. Effective purchasing systems. C. Compliance with laws and regulations. D. Reliable financial reporting