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Exam 1: Auditing and Internal Control

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Question 31

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Explain the purpose of the PCAOB.

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The Sarbanes-Oxley Act creates a Public ...

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Question 32

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Define general controls.

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General controls apply to all systems. T...

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Question 33

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Internal control system have limitations. These include all of the following except

A well-designed purchase order is an example of a

Use the internal control procedures listed below to complete statements. $\begin{array}{lccc}\text { segregation of duties} & \text { specitic authorization}\\\text { general authorization} & \text { accounting records}\\\text { access controls} & \text { independent verification.}\\\text { supervision}\\\end{array}$ -Using cameras to monitor the activities of cashiers is an example of __________________________.

An IT auditor expresses an opinion on the fairness of the financial statements.

Use the internal control procedures listed below to complete statements. $\begin{array}{lccc}\text { segregation of duties} & \text { specitic authorization}\\\text { general authorization} & \text { accounting records}\\\text { access controls} & \text { independent verification.}\\\text { supervision}\\\end{array}$ -A clerk reorders 250 items when the inventory falls below 25 items. This is an example of __________________________.

Does a qualified opinion on management's assessment of internal controls over the financial reporting system necessitate a qualified opinion on the financial statements? Explain.

Which of the following is the best reason to separate duties in a manual system?

The office manager forgot to record in the accounting records the daily bank deposit. Which control procedure would most likely prevent or detect this error?

Indicate whether each procedure is a preventive or detective control. a. authorizing a credit sale $\quad$ $\quad$ Preventive $\quad$ $\quad$ Detective b. preparing a bank reconciliation $\quad$ Preventive $\quad$ Detective c. locking the warehouse $\quad$ $\quad$ $\quad$ Preventive $\quad$ Detective d. preparing a trial balance $\quad$ $\quad$ $\quad$ Preventive $\quad$ Detective e. counting inventory $\quad$ $\quad$ $\quad$ $\quad$ Preventive $\quad$ Detective

A physical inventory count is an example of a

Segregation of duties is an example of an internal control procedure.

Which statement is not correct?

External auditing is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization.

Which of the following is not an internal control procedure?

Tests of controls determine whether the database contents fairly reflect the organization's transactions.

Which statement is not true?

Both the SEC and the PCAOB require management to use the COSO framework for assessing internal control adequacy.

The importance to the accounting profession of the Sarbanes-Oxely Act is that