Questions are on Advanced Auditing Issues, they are multiple choice questions

1. Which of the following would an auditor likely review first when developing an understanding of the internal control system? Control activities Monitoring Control environment Risk assessment Question 2 1. Which statement is true? If you set internal control at the maximum you do not have to document your understanding The control environment sets the tone of the organization If you use the substantive strategy you do not plan to rely on the internal control system All of the above are true statements Question 3 1. Which of the following documentation is required? Internal control questionnaire Flowchart Decision tree All of the above are required Question 4 1. Which of the following is the greatest limitation of internal control? Cost/benefit constraint The human factor Separation of management from owners Lack of audit trail Question 5 1. As an in-charge auditor you are reviewing a communication about reportable conditions related to internal control over cash receipts and disbursements. Which of the following conditions, standing alone, should cause you the most concern? Checks are signed by only one person Supporting documentation is reviewed by the person signing the checks Distribution of payroll checks is performed by the person that signs the checks None of the above would cause an auditor concern Question 6 1. As an auditor which of the following gives you a \"warm and fuzzy feeling\" ? The existence of a quality control department A budget with periodic variance analysis The existence of an internal control function The existence of an audit committee Question 7 1. Which of the following is generally not an internal control activity? Payroll is always vouchered The treasurer signs and mails the checks Large checks require two signatures All of the above are common control activities Question 8 1. In a well-designed internal control system which of the following is an example of general authorization? Acceptance of special orders Granting of credit Two signatures on large denominated checks All of the above are examples of specific authorization circumstances