Chapter 11 Auditing

the internal control framework used by most US companies is the --- framework

COSO

which of the following best describes an entity's accounting information and communication system?

Monitor transactions NO Record and process transactions YES Initiate transactions yes

authorizations can be either general or specific. which of the following is not an example of a general authorization?

a sales manager's authorization for a sales return for a particular customer

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 statement that management is responsible for establishing and maintaining an adequate internal control structure and procedures for financial reporting

which of the following is not one of the subcomponents of the control environment

adequate separation of duties

the sabanes-oxley act requires

all public companies to issue reports on internal controls effectiveness

which of the following statements related to application controls is correct?

application controls relate to the processing of individual transactions

which of the following is not one of the three primary objectives of effective internal control

assurance of elimination of business risk

internal controls

consist of policies an procedures designed to provide reasonable assurance that the company achieves its objectives and goals

which of the following statements is most correct with respect to separation of duties

employees who authorize transactions should not have custody of related assets.

which of the following activities would be least likely to strengthen a company's internal control

maintaining insurance for fire and theft

which of the following best describes the purpose of control activities

the policies and procedures that help ensure that necessary actions are taken to address risks to the achievement of the entity's objectives