ACTG 135 ch 10, Chapter 11
Auditors may identify conditions during fieldwork that change or support a judgment about the initial assessment of fraud risks. Which of the following is not a condition which should alert an auditor that the initial assessment should be changed? A) The subsidiary ledger agrees to the general ledger. B) Discrepancies in the accounting records C) Unusual relationships between the auditor and management D) Missing or conflicting evidence
A
Auditors need to exhibit professional skepticism when auditing a client. This auditing standard is best expressed by which of the following? A) The auditor neither assumes dishonesty or honesty of management. B) The auditor assumes dishonesty of management. C) The auditor assumes honesty of management. D) The auditor assumes management lacks integrity
A
Fraud is more prevalent in smaller businesses and not-for-profit organizations because it is more difficult for them to maintain: A) adequate separation of duties. B) adequate compensation. C) adequate financial reporting standards. D) adequate supervisory boards
A
Research indicates that the most effective way to prevent and deter fraud is to: A) implement programs and controls that are based on core values embraced by the company. B) hire highly ethical employees. C) communicate expectations to all employees on an annual basis. D) terminate employees who are suspected of committing fraud
A
Two of the most useful warning signals that can indicate that revenue fraud is occurring are: A) analytical procedures and documentary discrepancies. B) analytical procedures and misappropriation of assets. C) documentary discrepancies and vague responses to inquiries. D) missing audit evidence and vague responses to inquiries
A
Which of the following is the best reason for management to emphasize fraud prevention and deterrence? A) It is often more effective and economical for companies to focus on fraud prevention and deterrence rather than on fraud detection. B) Collusion is impossible to detect. C) The AICPA requires management to implement a fraud prevention program. D) All of the above are equally valid reasons
A
Which of the following would the auditor be most concerned about regarding a heightened risk of intentional misstatement? A) Senior management emphasizes that it is very important to beat analyst estimates of earnings every reporting period. B) Senior management emphasizes that budgeted amounts for expenses are to be achieved for each reporting period or explained in the variance analysis report. C) Senior management emphasizes that job rotation is a worthwhile corporate objective. D) Senior management emphasizes that job evaluations are based on performance
A
Companies may intentionally understate earnings when income is high to create ________ that may be used in future years to increase earnings. A) income smoothing B) cookie jar reserves C) cash D) sales
B
Misappropriation of assets is normally perpetrated by: A) members of the board of directors. B) employees at lower levels of the organization. C) management of the company. D) the internal auditors
B
Most cases of fraudulent reporting involve: A) inadequate disclosures. B) an overstatement of income. C) an overstatement of liabilities. D) an overstatement of expenses
B
When assessing the risk for fraud, the auditor must be cognizant of the fact that: A) the existence of fraud risk factors means fraud exists. B) analytical procedures must be performed on revenue accounts. C) horizontal analysis is not useful in helping to determine unusual financial statement relationships. D) the auditor cannot make inquiries about fraud to company personnel who have no financial statement responsibilities.
B
Which of the following best defines fraud in a financial statement auditing context? A) Fraud is an unintentional misstatement of the financial statements. B) Fraud is an intentional misstatement of the financial statements. C) Fraud is either an intentional or unintentional misstatement of the financial statements, depending on materiality. D) Fraud is either an intentional or unintentional misstatement of the financial statements, depending on consistency
B
Which of the following is a factor that relates to incentives or pressures to commit fraudulent financial reporting? A) Significant accounting estimates involving subjective judgments B) Excessive pressure for management to meet debt repayment requirements C) Management's practice of making overly aggressive forecasts D) High turnover of accounting, internal audit, and information technology staff
B
Which of the following is a factor that relates to incentives to misappropriate assets? A) Significant accounting estimates involving subjective judgments B) Significant personal financial obligations C) Management's practice of making overly aggressive forecasts D) High turnover of accounting, internal audit and information technology staff
B
Which of the following matters related to the auditor's consideration of material misstatements due to fraud are required to be documented? A) Reasons supporting a conclusion that there is not a significant risk of material improper expense recognition B) Procedures performed to obtain information necessary to identify and assess the risks of material fraud C) Results of the internal auditor's procedures performed to address the risk of management override of controls D) Discussions with management regarding the hiring of a new plant manager
B
Which party has the primary responsibility to oversee an organization's financial reporting and internal control process? A) The board of directors B) The audit committee C) Management of the company D) The financial statement auditors
B
A company is concerned with the theft of cash after the sale has been recorded. One way in which fraudsters conceal the theft is by a process called "lapping." Which of the following best describes lapping? A) Reduce the customer's account by recording a sales return B) Write off the customer's account C) Apply the payment from another customer to the customer's account D) Reduce the customer's account by recording a sales allowance
C
Auditing standards specifically require auditors to identify ________ as a fraud risk in most audits. A) overstated assets B) understated liabilities C) improper revenue recognition D) overstated expenses
C
Company management is often under pressure to increase revenue and/or net income. One approach is to use a "bill and hold" arrangement. This is an example of which of the following? A) Significant accounting estimates B) Fictitious revenue recorded C) Premature revenue recognized D) Alteration of cutoff documents
C
Financial statement manipulation risk is arguably present for all companies' financial statements. However, the risk is elevated for companies that: A) are heavily regulated. B) have low amounts of debt. C) have to make significant judgments for accounting estimates. D) operate in stable economic environments
C
Fraud awareness training should be: A) broad and all-encompassing. B) extensive and include details for all functional areas. C) specifically related to the employee's job responsibility. D) focused on employees understanding the importance of ethics
C
In the fraud triangle, fraudulent financial reporting and misappropriation of assets: A) share little in common. B) share most of the same risk factors. C) share the same three conditions. D) share most of the same conditions
C
Which of the following is a factor that relates to attitudes or rationalization to commit fraudulent financial reporting? A) Significant accounting estimates involving subjective judgments B) Excessive pressure for management to meet debt repayment requirements C) Management's practice of making overly aggressive forecasts to third parties D) High turnover of accounting, internal audit and information technology staff
C
Which of the following is a form of earnings management in which revenues and expenses are shifted between periods to reduce fluctuations in earnings? A) Fraudulent financial reporting B) Expense smoothing C) Income smoothing D) Each of the above is correct
C
Which of the following is not a factor that relates to opportunities to commit fraudulent financial reporting? A) Lack of controls related to the calculation and approval of accounting estimates B) Ineffective oversight of financial reporting by the board of directors C) Management's practice of making overly aggressive forecasts D) High turnover of accounting, internal audit, and information technology staff
C
Which of the following parties is responsible for implementing internal controls to minimize the likelihood of fraud? A) External auditors B) Audit committee members C) Management D) Committee of Sponsoring Organizations
C
Which of the following questions is the auditor not required to ask company management when assessing fraud risk? A) Does management have knowledge of any fraud or suspected fraud within the company? B) What are the nature of the fraud risks identified by management? C) Is management using all assets effectively? D) What internal controls have been implemented to address the fraud risks
C
Who is most likely to perpetrate fraudulent financial reporting? A) Members of the board of directors B) Production employees C) Management of the company D) The internal auditors
C
________ is fraud that involves theft of an entity's assets. A) Fraudulent financial reporting B) A "cookie jar" reserve C) Misappropriation of assets D) Income smoothing
C
Analytical procedures can be very effective in detecting inventory fraud. Which of the following analytical procedures would not be useful in detecting fraud? A) Gross margin percentage B) Inventory Turnover C) Cost of sales percentage D) Accounts receivable turnover
D
Determine from the following the factor that would most likely elevate the auditor's concern about the risk of financial statement fraud. A) Company cannot borrow debt capital without restrictive covenants. B) Company finds it difficult to sell equity capital for expansion. C) Company has a significant portion of liquid assets on its balance sheet. D) Company reports substantial net income but ever decreasing cash flow from operations
D
When dealing with revenue frauds: A) the most egregious form of revenue fraud involves premature revenue recognition. B) premature revenue recognition involves recognizing the revenue after the accounting standards requirements have been met. C) premature revenue recognition is the same as cutoff errors. D) side agreements can modify the terms of the sales transaction and should be analyzed carefully.
D
Which of the following does not represent an increased opportunity to commit fraud? A) Related party transactions B) The company founder is the CEO and Chairman of the Board. C) The financial statements involve accounting estimates. D) The company is a new audit client for the CPA firm
D
Which of the following is not a factor that relates to opportunities to misappropriate assets? A) Inadequate internal controls over assets B) Presence of large amounts of cash on hand C) Inappropriate segregation of duties or independent checks on performance D) Adverse relationships between management and employees
D
Which of the following is not a likely source of information to assess fraud risks? A) Communications among audit team members B) Inquiries of management C) Analytical procedures D) Consideration of fraud risks discovered during recent audits of other clients
D
An act of two or more employees to steal assets and cover their theft by misstating the accounting records would be referred to as: A) collusion. B) a material weakness. C) a control deficiency. D) a significant deficiency.
a
In performing the audit of internal control over financial reporting the auditor emphasizes internal control over class of transactions because: A) the accuracy of accounting system outputs depends heavily on the accuracy of inputs and processing. B) the class of transaction is where most fraud schemes occur. C) account balances are less important to the auditor then the changes in the account balances. D) classes of transactions tests are the most efficient manner to compensate for inherent risk.
a
Internal controls are not designed to provide reasonable assurance that: A) all frauds will be detected. B) transactions are executed in accordance with management's authorization. C) the company's resources are used efficiently and effectively. D) company personnel comply with applicable rules and regulations.
a
Once auditors determine that entity level controls are designed and placed in the operation they: A) make a preliminary assessment for each transaction-related audit objective for each major type of transaction. B) make a preliminary assessment of control risk. C) obtain an understanding of the design and implementation of internal control. D) prepare audit documentation in order to opine on the company's internal control system.
a
Reasonable assurance allows for: A) low likelihood that material misstatements will not be prevented or detected by internal controls. B) no likelihood that material misstatements will not be prevented or detected by internal control. C) moderate likelihood that material misstatements will not be prevented or detected by internal control. D) high likelihood that material misstatements will not be prevented or detected by internal
a
Sarbanes-Oxley requires management to issue an internal control report that includes two specific items. Which of the following is one of these two requirements? A) A statement that management is responsible for establishing and maintaining an adequate internal control structure and procedures for financial reporting B) A statement that management and the board of directors are jointly responsible for establishing and maintaining an adequate internal control structure and procedures for financial reporting C) A statement that management, the board of directors, and the external auditors are jointly responsible for establishing and maintaining an adequate internal control structure and procedures for financial reporting D) A statement that the external auditors are solely responsible
a
The Sarbanes-Oxley Act requires: A) all public companies to issue reports on internal controls. B) all public companies to define adequate internal controls. C) the auditor of public companies to design effective internal controls. D) the auditor of public companies to withdraw from an engagement if internal controls are weak.
a
The employee in charge of authorizing credit to the company's customers does not fully understand the concept of credit risk. This lack of knowledge would constitute: A) a deficiency in operation of internal controls. B) a deficiency in design of internal controls. C) a deficiency of management. D) not constitute a deficiency.
a
The financial statements may not correctly reflect accounting frameworks such as GAAP or IFRS if the: A) controls affecting the reliability of financial reporting are inadequate. B) company's controls do not promote efficiency. C) company's controls do not promote effectiveness. D) company's controls do not promote compliance with applicable rules and regulations.
a
The primary emphasis by auditors is on controls over: A) classes of transactions. B) account balances. C) both A and B, because they are equally important. D) both A and B, because they vary from client to client.
a
The purpose of phase 3 in the "process for understanding internal control and assessing control risk" is to: A) design, perform and evaluate tests of controls. B) obtain and document an understanding of internal control design an operation. C) assess control risk. D) decide planned detection risk and substantive tests.
a
To obtain an understanding of an entity's control environment, an auditor should concentrate on the substance of management's policies and procedures rather than their form because: A) management may establish appropriate policies and procedures but not act on them. B) the board of directors may not be aware of management's attitude toward the control environment. C) the auditor may believe that the policies and procedures are inappropriate for that particular entity. D) the policies and procedures may be so weak that no reliance is contemplated by the auditor.
a
When a compensating control exists, the absence of a key control: A) is no longer a concern because there is no longer a significant deficiency or material weakness. B) is still a major concern to the auditor. C) could cause a material loss, so it must be tested using substantive procedures. D) is magnified and must be removed from the sampling process and examined in its entirety.
a
When assessing whether the financial statements are auditable, the auditor must consider: A) that the integrity of management and the adequacy of accounting records are the two primary factors determining auditability. B) that the integrity of management and the adequacy of risk management are the two primary factors determining auditability. C) that if all of the transaction information is available only in electronic form without a visible audit trail, the company cannot be audited. D) the control risk before determining if the entity is auditable.
a
Which of the following components of the control environment define the existing lines of responsibility and authority? A) Organizational structure B) Management philosophy and operating style C) Human resource policies and practices D) Management integrity and ethical values
a
Which of the following is most correct regarding the requirements under Section 404 of the Sarbanes Oxley Act? A) The audits of internal control and the financial statements provide reasonable assurance as to misstatements. B) The audit of internal control provides absolute assurance of misstatement. C) The audit of financial statements provides absolute assurance of misstatement. D) The audits of internal control and the financial statements provide absolute assurance as to misstatements.
a
Which of the following is responsible for establishing a private company's internal control? A) Senior Management B) Internal Auditors C) FASB D) Audit committee
a
Which of the following is the correct definition of "control deficiency"? A) A control deficiency exists if the design or operation of controls does not permit company personnel to prevent or detect misstatements on a timely basis. B) A control deficiency exists if one or more deficiencies exist that adversely affect a company's ability to prepare external financial statements reliably. C) A control deficiency exists if the design or operation of controls results in a more than remote likelihood that controls will not prevent or detect misstatements. D) A control deficiency exists if the design or operation of controls results in a more than probable likelihood that controls will prevent or detect misstatements.
a
An audit procedure that would most likely be used by an auditor in performing tests of control procedures in which the segregation of functions and that leaves no "audit" trail is: A) inspection. B) observation. C) reperformance. D) reconciliation.
b
Authorizations can be either general or specific. Which of the following is not an example of a general authorization? A) Automatic reorder points for raw materials inventory B) A sales manager's authorization for a sales return C) Credit limits for various classes of customers D) A sales price list for merchandise
b
If the results of tests of controls support the design and operations of controls as expected, the auditor uses ________ control risk as the preliminary assessment. A) a lower B) the same C) a higher D) either a lower or higher
b
Internal controls normally include procedures designed to provide reasonable assurance that: A) employees act with integrity when performing their assigned tasks. B) transactions are executed in accordance with management's authorization. C) decision processes leading to management's authorization of transactions are sound. D) collusive activities would be detected by segregation of employee duties.
b
Internal controls: A) are implemented by and are the responsibility of the auditors. B) consist of policies and procedures designed to provide reasonable assurance that the company achieves its objectives and goals. C) guarantee that the company complies with all laws and regulations. D) only apply to SEC companies.
b
It is important for the CPA to consider the competence of the clients' personnel because their competence has a direct impact upon the: A) cost/benefit relationship of the system of internal control. B) achievement of the objectives of internal control. C) comparison of recorded accountability with assets. D) timing of the tests to be performed.
b
Narratives, flowcharts, and internal control questionnaires are three common methods of: A) testing the internal controls. B) documenting the auditor's understanding of internal controls. C) designing the audit manual and procedures. D) documenting the auditor's understanding of a client's organizational structure.
b
Proper segregation of functional responsibilities calls for separation of: A) authorization, execution, and payment. B) authorization, recording, and custody. C) custody, execution, and reporting. D) authorization, payment, and recording.
b
Significant deficiencies are matters that come to an auditor's attention and should be communicated to an entity's audit committee because they represent: A) material frauds perpetrated by high-level management. B) internal control deficiencies that could adversely affect a company's ability to initiate, record, process, or report external financial statements reliably. C) flagrant violations of the entity's documented conflict-of-interest policies. D) intentional attempts by client personnel to limit the scope of the auditor's field work.
b
The auditor must communicate: A) only material weaknesses in internal control to those charged with governance. B) both significant deficiencies and material weaknesses in internal control to those charged with governance. C) any significant deficiencies in internal control to those charged with governance using a management letter. D) issues regarding internal control to those charged with governance in writing within 90 days following the audit report release.
b
The auditors primary purpose in auditing the client's system of internal control over financial reporting is: A) to prevent fraudulent financial statements from being issued to the public. B) to evaluate the effectiveness of the company's internal controls over all relevant assertions in the financial statements. C) to report to management that the internal controls are effective in preventing misstatements from appearing on the financial statements. D) to efficiently conduct the Audit of Financial Statements.
b
The person responsible for reconciling sales invoices to customer orders does not access to the company's master price list in order to correctly compute sales. This is an example of a(n): A) operating deficiency. B) design deficiency. C) training deficiency. D) management deficiency.
b
When considering internal controls, an important point to consider is that: A) auditors can ignore controls affecting internal management information. B) auditors are concerned with the client's internal controls over the safeguarding of assets if they affect the financial statements. C) management is responsible for understanding and testing internal control over financial reporting.
b
When dealing with the documentation of internal control: A) in a narrative, most questions simply require a "yes" or "no" response. B) questionnaires offer useful checklists to remind the auditor of the many different types of internal controls that should exist. C) questionnaires and flowcharts should not be used together. D) flowcharts fail to show the segregation of duties in the company. Answer: B
b
Which of management's assertions with respect to implementing internal controls is the auditor primarily concerned? A) Efficiency of operations B) Reliability of financial reporting C) Effectiveness of operations D) Compliance with applicable laws and regulations
b
Which of the following activities would be least likely to strengthen a company's internal control? A) Separating accounting from other financial operations B) Maintaining insurance for fire and theft C) Fixing responsibility for the performance of employee duties D) Carefully selecting and training employees
b
Which of the following deal with ongoing or periodic assessment of the quality of internal control by management? A) Quality monitoring activities B) Monitoring activities C) Oversight activities D) Management activities
b
Which of the following statements is most correct with respect to separation of duties? A) A person who has temporary or permanent custody of an asset should account for that asset. B) Employees who authorize transactions should not have custody of related assets. C) Employees who open cash receipts should record the amounts in the subsidiary ledgers. D) Employees who authorize transactions should have recording responsibility for these
b
You are performing the audit of internal control for Clifton Company. Which of the following would represent a material weakness in internal control? A) The company's audit committee has experienced unusual turnover of members. B) The company's CFO was indicted for embezzling from the company. C) Bank reconciliations are done monthly. D) The CEO retired after twenty years of service to the company.
b
An auditor should consider two key issues when obtaining an understanding of a client's internal controls. These issues are: A) the effectiveness and efficiency of the controls. B) the frequency and effectiveness of the controls. C) the design and operating effectiveness of the controls. D) the implementation and operating effectiveness of the controls.
c
Audit evidence regarding the separation of duties is normally best obtained by: A) preparing flowcharts of operational processes. B) preparing narratives of operational processes. C) observation of employees applying control activities. D) inquiries of employees applying control activities.
c
How must significant deficiencies and material weaknesses be communicated to those charged with governance? A) Either oral or written communication is acceptable. B) Oral communication is required. C) Written communication is required. D) Written communication is required for material weaknesses, but oral communication is allowed for significant deficiencies.
c
If a company has an effective internal audit department: A) the internal auditors can express an opinion on the fairness of the financial statements. B) their work cannot be used by the external auditors per PCAOB Standard 5. C) it can reduce external audit costs by providing direct assistance to the external auditors. D) the internal auditors must be CPAs in order for the external auditors to rely on their work.
c
Management must disclose material weaknesses in internal control in its audit report: A) whenever the weakness is deemed significant to a single class of transactions. B) whenever the weakness is significant to overall financial reporting objectives. C) if the weakness exists at the end of the year. D) only if the auditor identifies the weakness as significant.
c
Significant deficiencies and material weaknesses in internal control of a public company must be reported in writing to which of the following? A) Public Company Accounting Oversight Board B) Members of management who are responsible for the related area of the company C) Audit committee of the company's board of directors and to management D) AICPA
c
The PCAOB places responsibility for the reliability of internal controls over the financial reporting process on: A) the company's board of directors. B) the audit committee of the board of directors. C) management. D) the CFO and the independent auditors.
c
To issue a report on internal control over financial reporting for a public company, an auditor must: A) evaluate management's assessment process. B) independently assess the design and operating effectiveness of internal control. C) evaluate management's assessment process and independently assess the design and operating effectiveness of internal control. D) test controls over significant account balances.
c
Two key concepts that underlie management's design and implementation of internal control are: A) costs and materiality. B) absolute assurance and costs. C) inherent limitations and reasonable assurance. D) collusion and materiality.
c
When assessing control risk: A) many auditors use actuarial tables to assist in the control risk assessment process. B) each control can be used to satisfy only one audit objective. C) many auditors use a control risk matrix to assist in the control risk assessment process. D) all controls, including key controls, should be considered.
c
When one material weakness is present at the end of the year, management of a public company must conclude that internal control over financial reporting is: A) insufficient. B) inadequate. C) ineffective. D) inefficient.
c
When the auditor attempts to understand the operation of the accounting system by tracing a few transactions through the accounting system, the auditor is said to be: A) tracing. B) vouching. C) performing a walk-through. D) testing controls.
c
Which of the following best describes the purpose of control activities? A) The actions, policies and procedures that reflect the overall attitudes of management B) The identification and analysis of risks relevant to the preparation of financial statements C) The policies and procedures that help ensure that necessary actions are taken to address risks to the achievement of the entity's objectives D) Activities that deal with the ongoing assessment of the quality of internal control by management
c
Which of the following deficiency exists if a necessary control is missing or not properly formulated? A) Control B) Significant C) Design D) Operating
c
Which of the following groups establishes and maintains the company's internal controls? A) Internal auditors B) Board of Directors C) Management D) Audit committee
c
Which of the following is not one of the subcomponents of the control environment? A) Management's philosophy and operating style B) Organizational structure C) Adequate separation of duties D) Commitment to competence
c
Which of the following represents a correct statement regarding internal control testing? A) When auditors plan to use evidence about the operating effectiveness of internal control contained in prior audits, auditing standards require tests of the controls' effectiveness at least every other year. B) The greater the risk, the less audit evidence the auditor should obtain that controls are operating effectively. C) The auditor uses control risk assessment and results of tests of controls to determine planned detection risk and the related substantive tests for the financial statement audit. D) Testing of internal controls can only be performed by the auditor at the end of the fiscal year.
c
Without an effective ________, the other components of the COSO framework are unlikely to result in effective internal control, regardless of their quality. A) risk assessment policy B) monitoring policy C) control environment D) system of control activities
c
A five-step approach can be used to identify deficiencies, significant deficiencies, and material weaknesses. The first step in this approach is: A) identify the absence of key controls. B) consider the possibility of compensating controls. C) determine potential misstatements that could result. D) identify existing controls.
d
An auditor is likely to use four types of procedures to support the operating effectiveness of internal controls. Which of the following would generally not be used? A) Make inquiries of appropriate client personnel B) Examine documents, records, and reports C) Reperform client procedures D) Inspect design documents
d
External financial statement auditors must obtain evidence regarding what attributes of an internal audit (IA) department if the external auditors intend to rely on IA's work? A) Integrity B) Objectivity C) Competence D) All of the above
d
Hanlon Corp. maintains a large internal audit staff that reports directly to the accounting department. Audit reports prepared by the internal auditors indicate that the system is functioning as it should and that the accounting records are reliable. An independent auditor will probably: A) eliminate tests of controls. B) increase the depth of the study and evaluation of administrative controls. C) avoid duplicating the work performed by the internal audit staff. D) place limited reliance on the work performed by the internal audit staff.
d
Internal controls can never be regarded as completely effective. Even if company personnel could design an ideal system, its effectiveness depends on the: A) adequacy of the computer system. B) proper implementation by management. C) ability of the internal audit staff to maintain it. D) competency and dependability of the people using it.
d
Of the following statements about internal controls, which one is least likely to be correct? A) No one person should be responsible for the custodial responsibility and the recording responsibility for an asset. B) Transactions must be properly authorized before such transactions are processed. C) Because of the cost-benefit relationship, a client may apply controls on a test basis. D) Control procedures reasonably ensure that collusion among employees cannot occur.
d
To promote operational efficiency, the internal audit department would ideally report to: A) line management. B) PCAOB. C) Chief Accounting Officer. D) audit committee.
d
When determining what type of report to issue on internal control under Section 404: A) an adverse opinion on internal control must be given if any weaknesses in a key internal control is discovered. B) a scope limitation requires the auditor to disclaim an opinion on internal controls. C) if the auditor gives a qualified opinion on the financial statements, they must give a qualified opinion on internal controls. D) a scope limitation requires the auditor to express a qualified opinion or a disclaimer of opinion on internal controls.
d
Which of the following is correct with respect to the design and use of business documents? A) The documents should be in paper format. B) Documents should be designed for a single purposes to avoid confusion in their use. C) Documents should be designed to be understandable only by those who use them. D) Documents should be prenumbered consecutively to facilitate control over missing documents.
d
Which of the following is not one of the three primary objectives of effective internal control? A) Reliability of financial reporting B) Efficiency and effectiveness of operations C) Compliance with laws and regulations D) Assurance of elimination of business risk
d