Which of the following is not one of the inherent limitations of internal control?

a. Lack of proper segregation of incompatible duties

b. Management override

c. Faulty human judgment

d. Collusion

Physical controls to safeguard assets would include:

a. locks on the warehouse doors

b. safety audits on the production-line

c. segregation of duties

d. hiring only trustworthy cashiers

Monitoring

a. sets the tone of an organization, influencing the control consciousness of its people

b. is a process that assesses the quality of internal control performance over time

c. is the entity's identification and analysis of relevant risks as a basis for their management

d. support the identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities

Which of the following is least likely to be appropriate as the basis for determining the preliminary judgment about materiality in the audit of financial statements?

a. revenues

b. current liabilities

c. losses

d. assets

Questionnaires consist of a series of interrelated questions about internal control policies and procedures. The questions are typically phrased so that a "yes" indicates a control strength and a "No" indicates a potential weakness. An advantage(s) of the questionnaire is (are)

a. flexible to prepare, although difficulty for a complex system

b. identify the contingencies considered in the in the description of a problem and the appropriate actions to be taken in each case

c. provide a visual representation of the system and flexible in construction

d. help identify concerns and prevents the auditor from overlooking important control considerations

PSAs require the auditor to obtain understanding of the entity's internal structure

a. for every audit

b. for first time audit clients

c. sufficient to find any frauds that may exist

d. whenever the auditor wishes or sees necessary

Risk assessment procedures performed to obtain evidence about the design and implementation of relevant controls include

a. analytical procedures

b. recalculation

c. tracing transactions or walkthrough

d. external confirmation