ACC 544 Week 6 Quiz (Internal Controls) Recent

• Question 1    Which of the following payroll control activities would most effectively ensure that payment is made only for work performed?
• Question 2    Effective internal control over the payroll function would include which of the following?
• Question 3    One of the auditor’s objectives in observing the actual distribution of payroll checks is to determine that every name on the payroll is that of a bona fide employee. The payroll observation is an auditing procedure that is generally performed for which of the following reasons?
• Question 4    A large retail enterprise has established a policy which requires that the paymaster deliver all unclaimed payroll checks to the internal auditing department at the end of each payroll distribution day. This policy was most likely adopted in order to
• Question 5    In the audit of which of the following types of profit-oriented enterprises would the auditor be most likely to place special emphasis on testing the controls over proper classification of payroll transactions?
• Question 6    The reliance placed on substantive tests in relation to the reliance placed on internal control varies in a relationship that is ordinarily
• Question 7    An auditor uses the assessed level of the risk of material misstatement to
• Question 8    The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the
• Question 9    An audit client failed to maintain copies of its procedures manuals and organizational flowcharts. What should the auditor do in an audit of financial statements?
• Question 10 As a result of tests of controls, an auditor assesses control risk too high.  This incorrect assessment most likely occurred because
• Question 11 To provide assurance that each voucher is submitted and paid only once, an auditor most likely would examine a sample of paid vouchers and determine whether each voucher is
• Question 12 A client erroneously recorded a large purchase twice. Which of the following controls would be most likely to detect this error in a timely and efficient manner?
• Question 13  A client’s materials-purchasing cycle begins with requisitions from user departments and ends with the receipt of materials and the recognition of a liability. An auditor’s primary objective in reviewing this cycle is to
• Question 14  The company being audited has an internal auditor that is both competent and objective. The independent auditor wants to assign tasks for the internal auditor to perform. Under these circumstances, the independent auditor may
• Question 15  An effective control that protects against the preparation of improper or inaccurate disbursements would be to require that all checks be
• Question 16  During a financial statement audit an internal auditor may provide direct assistance to the independent CPA in performing
• Question 17  When assessing internal auditors’ objectivity, an independent auditor should
• Question 18  Which of the following factors most likely would assist an independent auditor in assessing the objectivity of the internal auditor?
• Question 19 Which of the following is the most effective control to detect vouchers that were prepared for the payment of goods that were not received?
• Question 20  Miller Retailing, Inc. maintains a staff of three full-time internal auditors who report directly to the controller.  In planning to use the internal auditors to provide assistance in performing the audit, the independent auditor most likely will
• Question 21 The accounts payable department receives the purchase order form to accomplish all of the following except
• Question 22  The independent auditor should acquire an understanding of the internal audit function as it relates to the independent auditor’s consideration of internal control because
• Question 23 For effective internal control purposes, the vouchers payable department generally should
• Question 24 For which of the following judgments may an independent auditor share responsibility with an entity’s internal auditor who is assessed to be both competent and objective?
• Question 25  If the independent auditor decides that the work performed by internal auditors may have a bearing on the independent auditor’s own procedures, the independent auditor should consider the objectivity of the internal auditors.  One method of judging objectivity is to
• Question 26 While obtaining an understanding of a client’s risk assessment policies, an auditor ordinarily considers how management
• Question 27 Management’s attitude toward aggressive financial reporting and its emphasis on meeting projected profit goals most likely would significantly influence an entity’s control environment when
• Question 28 Which of the following statements is correct regarding internal control?
• Question 29 Which of the following factors is most relevant when an auditor considers the client’s organizational structure in the context of control risk?
• Question 30  Which of the following analytical procedures most likely would be used during the risk assessment stage of an audit?
• Question 31 Analytical procedures performed during the risk assessment phase of an audit should focus on
• Question 32 Which of the following is an analytical procedure that an auditor most likely would perform when performing the risk assessment of an audit?
• Question 33 Which of the following most likely would cause an auditor to consider whether a client’s financial statements contain material misstatements?
• Question 34  To help plan the nature, timing, and extent of substantive auditing procedures, preliminary analytical procedures should focus on
• Question 35 When a customer fails to include a remittance advice with a payment, it is a common practice for the person opening the mail to prepare one. Consequently, mail should be opened by which of the following four company employees?
• Question 36  Which one of the following would the auditor consider to be an incompatible operation if the cashier receives remittances from the mailroom?
• Question 37 An auditor’s tests of controls for completeness for the revenue cycle usually include determining whether
• Question 38  An auditor reviews a client’s accounting policies and procedures when considering which of the following planning matters?
• Question 39  An entity with a large volume of customer remittances by mail could most likely reduce the risk of employee misappropriation of cash by using
• Question 40  An auditor has identified the controller’s review of the bank reconciliation as a control to test. In connection with this test, the auditor interviews the controller to understand the specific data reviewed on the reconciliation. In addition, the auditor verifies that the bank reconciliation is properly prepared by the accountant and reviewed by the controller as evidenced by their respective sign-offs. Which of the following types of audit procedures do these actions illustrate?
• Question 41 Which of the following best represents a key control for ensuring sales are properly authorized when assessing control risks for sales?
• Question 42 An auditor who uses a transaction cycle approach to assessing control risk most likely would test control activities related to transactions involving the sale of goods to customers with the
• Question 43  To determine whether internal control relative to the revenue cycle of a wholesaling entity is operating effectively in minimizing the failure to prepare sales invoices, an auditor most likely would select a sample of transactions from the population represented by the
• Question 44 For effective internal control, the billing function should be performed by the
• Question 45  At which point in an ordinary sales transaction of a wholesaling business would a lack of specific authorization be of least concern to the auditor in the conduct of an audit?
• Question 46  Which of the following fraudulent activities most likely could be perpetrated due to the lack of effective internal control in the revenue cycle?
• Question 47 To verify that all sales transactions for which shipment has occurred have been recorded, a test of transactions should be completed on a representative sample drawn from
• Question 48  After testing a client’s internal control activities, an auditor discovers a number of significant deficiencies in the operation of a client’s internal control.  Under these circumstances the auditor most likely would
• Question 49  Which of the following is true regarding significant deficiencies?
• Question 50  During the audit the independent auditor identified the existence of a significant deficiency in the client’s internal control and communicated this finding in writing to the client’s management and to those charged with governance.  The auditor should
• Question 51  Which of the following statements is correct concerning an auditor’s communication on internal control related matters noted in an audit?
• Question 52  Which of the following would not typically be a control relied upon during an audit?
• Question 53 The auditor would be least likely to be concerned about internal control as it relates to
• Question 54 When preparing a record of a client’s internal control, the independent auditor sometimes uses a flowchart, which can best be described as a
• Question 55 One important reason why a CPA, during the course of an audit engagement, prepares internal control flowcharts is to
• Question 56 In an audit of financial statements, an auditor’s primary consideration regarding a control is whether the control
• Question 57  Effective internal control requires organizational independence of departments. Organizational independence would be impaired in which of the following situations?
• Question 58 An auditor would most likely be concerned with controls that provide reasonable assurance about the
• Question 59  Proper segregation of functional responsibilities calls for separation of the
• Question 60 Which of the following sets of duties would ordinarily be considered basically incompatible in terms of good internal control?
• Question 61 A primary objective of procedures performed to obtain an understanding of internal control is to provide an auditor with
• Question 62  Which of the following factors is most likely to affect the extent of the documentation of the auditor’s understanding of a client’s system of internal controls?
• Question 63  Walk-throughs provide evidence that helps auditors to
• Question 64  An auditor’s tests of controls over the issuance of raw materials to production would most likely include
• Question 65 Well functioning internal control for the inventory/production functions would provide that finished goods are to be accepted for stock only after presentation of a completed production order and a(n)
• Question 66 Tests of controls are performed in order to determine whether
• Question 67  Which of the following would be least likely to be included in an auditor’s tests of controls?
• Question 68 Which of the following is not a step in an auditor’s decision to conclude that controls operate effectively?
• Question 69  When an auditor plans to rely on controls that have changed since they were last tested, which of the following courses of action would be most appropriate?
• Question 70 Which of the following is a step in an auditor’s decision to assess the risk of material misstatement at a low level by relying on controls?
• Question 71 A client maintains a large data center where access is limited to authorized employees.  How may an auditor best determine the effectiveness of this control activity?
• Question 72 Which of the following is an inherent limitation of internal controls?
• Question 73 An independent auditor has concluded that the client’s records, procedures, and representation can be relied upon based on tests made during the year when internal control was found to be effective. The auditor should test the records, procedures, and representations again at year-end if
• Question 74 When considering internal control to determine whether the necessary procedures are designed and operating effectively, an auditor must
• Question 75  Which of the following is required documentation in an audit in accordance with generally accepted auditing standards?

ACC 544 Week 6 Quiz (Auditing) Recent

• Question 1    Which of the following statements most likely represents a disadvantage for an entity that keeps microcomputer-prepared data files rather than manually prepared files?
• Question 2    A primary advantage of using generalized audit packages in the audit of an advanced computer system is that it enables the auditor to
• Question 3    Which of the following statements most likely represents a disadvantage for an entity that keeps microcomputer-prepared data files rather than manually prepared files?
• Question 4    Which of the following client computer systems generally can be audited without examining or directly testing computer programs of the system?
• Question 5    An independent auditor studies and evaluates a client’s computer system. The auditor’s study includes tests of controls that might include which of the following?
• Question 6    If a CPA wishes to identify all checks written for an amount over $1,000,000 that are included in a relational database, a likely approach to obtaining the list would be through a
• Question 7    Which of the following outcomes is a likely benefit of information technology used for internal control?
• Question 8    An auditor may decide not to perform tests of controls related to the computer portion of the client’s controls. Which of the following would not be a valid reason for choosing to omit tests of controls?
• Question 9    Which of the following is an advantage of using a value-added network for EDI transactions?
• Question 10 Which of the following is an auditor’s client most likely to use to perform queries requested by the auditor of a relational database?
• Question 11 Which of the following are essential elements of the audit trail in an electronic data interchange (EDI) system?
• Question 12 An auditor may use a “join” command in a database query to combine
• Question 13  A CPA might find information on the structure of relational database tables through which language interface?
• Question 14 Which of the following statements is correct concerning internal control in an electronic data interchange (EDI) system?
• Question 15 Which of the following is usually a benefit of transmitting transactions in an electronic data interchange (EDI) environment?
• Question 16 Which of the following is usually a benefit of using electronic funds transfer for international cash transactions?
• Question 17  In building an electronic data interchange (EDI) system, what process is used to determine which elements in the entity’s computer system correspond to the standard data elements?
• Question 18  Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
• Question 19  In which of the following circumstances would an auditor expect to find that an entity implemented automated controls to reduce risks of misstatement?
• Question 20 Carmel Department Store has an ERP information system and is planning to issue credit cards to creditworthy customers. To strengthen internal control by making it difficult for one to create a valid customer account number, the company’s independent auditor has suggested the inclusion of a check digit which should be placed
• Question 21  Which of the following characteristics distinguishes electronic data interchange (EDI) from other forms of electronic commerce?
• Question 22  Which of the following is an engagement attribute for an audit of an entity that processes most of its financial data in electronic form, without any paper documentation?
• Question 23  Which of the following computer-assisted auditing techniques processes client input data on a controlled program under the auditor’s control to test controls in the computer system?
• Question 24 An auditor would least likely use computer software to
• Question 25  Which of the following statements is not true of the test data approach to testing an accounting system?
• Question 26 When an auditor tests a computerized accounting system, which of the following is true of the test data approach?When an auditor tests a computerized accounting system, which of the following is true of the test data approach?
• Question 27  A primary advantage of using generalized audit software packages to audit the financial statements of a client that uses an EDP system is that the auditor may
• Question 28  Which of the following strategies would a CPA most likely consider in auditing an entity that processes most of its financial data only in electronic form, such as a paperless system?
• Question 29  Which of the following is an engagement attribute for an audit of an entity that processes most of its financial data in electronic form, without any paper documentation?
• Question 30 Which of the following computer-assisted auditing techniques processes client input data on a controlled program under the auditor’s control to test controls in the computer
• Question 31 In auditing an entity’s computerized payroll transactions, an auditor would be least likely to use test data to test controls concerning
• Question 32  Processing data through the use of simulated files provides an auditor with information about the operating effectiveness of control policies and procedures.
• Question 33 An auditor would most likely be concerned with which of the following controls in a distributed data processing system?
• Question 34  A retailing entity uses the Internet to execute and record its purchase transactions. The entity’s auditor recognizes that the documentation of details of transactions will be retained for only a short period of time. To compensate for this limitation, the auditor most likely would
• Question 35 Which of the following is a general control that would most likely assist an entity whose systems analyst left the entity in the middle of a major project?
• Question 36  When an auditor tests the internal controls of a computerized accounting system, which of the following is true of the test data approach?
• Question 37 Which of the following most likely represents a significant deficiency in the internal control structure?
• Question 38  Which of the following types of evidence would an auditor most likely examine to determine whether internal control structure policies and procedures are operating as designed?
• Question 39  If a control total were computed on each of the following data items, which would best be identified as a hash total for a payroll EDP application?
• Question 40 An auditor most likely would test for the presence of unauthorized EDP program changes by running a
• Question 41 Which of the following controls most likely would assure that an entity can reconstruct its financial records?
• Question 42  An auditor most likely would introduce test data into a computerized payroll system to test internal controls related to the
• Question 43 Which of the following controls is a processing control designed to ensure the reliability and accuracy of data processing?
• Question 44 Which of the following are essential elements of the audit trail in an electronic data interchange (EDI) system?
• Question 45 Which of the following is an example of a validity check?
• Question 46  Which of the following control procedures most likely could prevent EDP personnel from modifying programs to bypass programmed controls?
• Question 47 When evaluating internal control of an entity that processes sales transactions on the Internet, an auditor would be most concerned about the
• Question 48 Which of the following procedures would an entity most likely include in its disaster recovery plan?
• Question 49  An auditor who wishes to capture an entity’s data as transactions are processed and continuously test the entity’s computerized information system most likely would use which of the following techniques?
• Question 50 In auditing an entity’s computerized payroll transactions, an auditor would be least likely to use test data to test controls concerning
• Question 51  Which of the following is a computer-assisted audit technique that permits an auditor to use the auditor’s version of a client’s program to process data and compare the output with the client’s output?
• Question 52  Which of the following could be difficult to determine because electronic evidence may not be retrievable after a specific period?
• Question 53  When companies use information technology (IT) extensively, evidence may be available only in electronic form. What is an auditor’s best course of action in such situations?
• Question 54  When an auditor tests the internal controls of a computerized accounting system, which of the following is true of the test data approach?
• Question 55  When conducting fieldwork for a physical inventory, an auditor cannot perform which of the following steps using a generalized audit software package?
• Question 56 Which of the following is not a problem associated with the use of test data for computer-audit purposes?
• Question 57  In parallel simulation, actual client data are reprocessed using an auditor software program. An advantage of using parallel simulation, instead of performing tests of controls without a computer, is that
• Question 58 Which of the following is necessary to audit balances in an on-line EDP system in an environment of destructive updating?
• Question 59 Which of the following passwords would be most difficult to crack?
• Question 60 A computer-assisted audit technique that is most likely to be effective in a continuous auditing environment is
• Question 61  Smith Corporation has numerous customers. A customer file is kept on disk storage. Each customer file contains name, address, credit limit, and account balance. The auditor wishes to test this file to determine whether credit limits are being exceeded. The best procedure for the auditor to follow would be to
• Question 62  When an auditor tests a computerized accounting system, which of the following is true of the test data approach?
• Question 63  An audit technique which involves actual analysis of the logic of a computer program’s processing routines is referred to as
• Question 64 In auditing through a computer, the test data method is used by auditors to test the
• Question 65 A primary advantage of using generalized audit software packages to audit the financial statements of a client that uses a computer system is that the auditor may
• Question 66 Which of the following is an advantage of generalized computer audit packages?
• Question 67 The individual with whom an auditor would be most likely to discuss specific access controls within a client’s relational database management system is the
• Question 68 Which of the following is not a technique to continuously test controls within a computer system?
• Question 69 To obtain evidence that user identification and password controls are functioning as designed, an auditor would most likely
• Question 70 When testing a computerized accounting system, which of the following is not true of the test data approach?
• Question 71  Which of the following is not a major reason for maintaining an audit trail for a computer system?
• Question 72 In building an electronic data interchange (EDI) system, what process is used to determine which elements in the entity’s computer system correspond to the standard data elements?
• Question 73 Which of the following is not a major reason for maintaining an audit trail for a computer system?
• Question 74 Auditing by testing the input and output of a computer system instead of the computer program itself will
• Question 75 An auditor anticipates assessing control risk at a low level in a computerized environment. Under these circumstances, on which of the following controls would the auditor initially focus? 

ACC 544 Week 6 Evaluating Internal Controls (2 Papers) Recent

This Tutorial contains 2 Papers

You have been hired to evaluate internal controls for your client organization. The CFO for your client wants a report outlining the evaluation to share with the Board of Directors.
·         Evaluate the criteria to identify and report identified control deficiencies
·         Analyze the reporting requirements for both public and private organizations.
·         Paper provides sufficient background on the topic and previews major points.
·         At least three sources are used
·         Write a 1,400- to 2,450-word report showing your plan to evaluate internal controls.
·         Evaluate the criteria to identify and report identified control deficiencies.
·         Analyze the reporting requirements for both public and private organizations.

ACC 544 Week 5 Team Asset Governance (2 Papers) Recent