Auditing Chapter 7

Which of the following is not ordinarily a procedure for documenting an auditor's understanding of internal control for planning purposes

Confirmation

When a CPA decides that the work performed by internal auditors may have an effect on the nature, timing, and extent of the CPAs procedures, the CPA should consider the competence and objectivity of the internal auditors. Relative to objectivity, the CPA should

Consider the organizational level to which the internal auditors report the results of their work

Which of the following would be least likely to be considered an objective of internal control

Detecting management fraud

Effective internal control in a small company that has an insufficient number of employees to permit proper separation of responsibilities can be improved by

Direct participation by the owner in key record keeping and control activities of the business

Which of the following is not an advantage of establishing an enterprise risk management system within an organization

Eliminates all risks.

To have an adequate basis to issue a management report on internal control under section 404A of the Sarbanes Oxley act, management must do all of the following except

Establish internal control with no material weakness

The primary objective of procedure is performed to obtain an understanding of internal control is provide the auditors with

Knowledge necessary to determine the nature, timing, and extent of further audit procedures

An entities ongoing monitoring activities often include

Management review of weekly performance reports

Controls over financial reporting are often classified as preventative, detective, or corrective. Which of the following is an example of a detective control?

Preparing bank reconciliations

An auditor may compensate for a weakness in the internal control by increasing the extent of

Substantive test of details

When the auditors are performing a first-time internal control audit in accordance with the Sarbanes-Oxley Act and PCAOB standards, they should:

Test controls for all significant accounts.

Which of the following symbols indicate that a file has been consulted

trapezoid to a triangle with a <-> in between it