All of the following are possible responses to a pervasive weakness in internal control except: Multiple Choice Assign more experienced personnel to the engagement. Increasing the level of supervision on the engagement. Increase the size of a sample for certain tests in the engagement. Adding an element of unpredictability to the procedures performed.

All of the following are possible responses to a pervasive weakness in internal control except: Multiple Choice Assign more experienced personnel to the engagement. Increasing the level of supervision on the engagement. Increase the size of a sample for certain tests in the engagement. Adding an element of unpredictability to the procedures performed.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process

Section: Chapter Questions

Problem 65RSCQ

See similar textbooks

Similar questions

Management can expect various benefits to follow from implementing a system of strong internal control. Which of the following benefits is least likely to occur?a. reduction of cost of an external auditb. prevention of employee collusion to commit fraudc. availability of reliable data for decision-making purposesd. some assurance of compliance with the Foreign Corrupt Practices Act of 1977e. some assurance that important documents and records are protected
A reliance strategy is chosen when the auditor: Multiple Choice Plans on conducting tests of controls. Has set the control risk at a high level. Has set the control risk at a lower level. Has not conducted a detailed understanding and documentation of internal control.
In the aftermath of the initial stage of examining a client's computer controls, an auditor might choose not to conduct compliance tests concerning the controls within the computer segment of the client's internal control. Which of the following reasons would be considered invalid for opting to exclude such tests? Select one: a. The controls duplicate operative controls existing elsewhere in the structure. b. The time and dollar costs of testing exceed the time and dollar savings in substantive testing if the tests of controls show the controls to be operative. c. There appear to be major weaknesses that would preclude reliance on the stated procedure. d. The controls appear adequate.
After obtaining an understanding of an entitiy's internal control, an auditor may assess control risk at the maximum level for some assertions because he A. performs tests of controls to restrict detection risk to an acceptable level. B. identifies internal control policies and procedures that are likely to prevent material misstatements. C. believes the internal control policies and procedures are unlikely to be effective. D. determines that the pertinent internal control components are not well documented.
If the tests of controls indicate certain controls are not as effective as the auditor originally believed, which of the following will result? Select all that apply. O increased number of substantive procedures will be planned O audit planning strategy adjusted O control risk will be increased O detection risk is increased O increased number of control tests will be performed
An organization has a mature control environment but limited audit resources. Given this scenario, on which of the following should internal auditors focus their testing? a. Detective compensating controls b. Preventive compensating controls c. Detective key controls d. Preventive key controls
Why is the audit team more concerned with controlling the exposure to the risk of overreliancethan with the risk of underreliance?a. Only the risk of overreliance results in an incorrect audit decision.b. The risk of underreliance is not related to the audit team’s study and evaluation of internalcontrol.c. The risk of overreliance can ultimately result in the audit team’s failing to reduce auditrisk to acceptable levels.d. The risk of underreliance can be controlled by performing tests of controls during theinterim period.
In an environment that is highly automated, an auditor determines that it is not possible toreduce detection risk solely by using substantive tests of transactions. Under these circumstances, the auditor most likely woulda. Perform tests of controls to support a lower level of assessed control risk.b. Increase the sample size to reduce sampling risk and detection risk.c. Adjust the materiality level and consider the effect on inherent risk.d. Apply analytical procedures and consider the effect on control risk
1. If detective controls signal error flags, why shouldn’t these types of controls automatically make a correction in the identified error? Why are corrective controls necessary? 2. Discuss the nonaccounting services that external auditors are no longer permitted to render to audit clients. 3. Discuss whether a firm with fewer employees than there are incompatible tasks should rely more heavily on general authority than specific authority. 4. According to SAS 78/COSO, the proper segregation of functions is an effective internal control procedure. Please Discuss. PLEASE NO PLAGIARSIM. THANK YOU!!
Which of the following categories is not relevant as the audit team inquires with management regarding their internal control system? Multiple Choice О policies and procedures vacation policy development of control activities information technology
Which of the following is not a common procedure for assessing operating effectiveness of preventive controls? a. Observation of personnel b. Analysis of trends or ratios c. Inspection of documents d. Inquiries of management
Study and Evaluation of Management Control. The study and evaluation of management risk mitigation control is not easy. First, auditors must determine the risks and the controls subject to audit. Then they must find a standard by which performance of the control can be evaluated. Next they must specify procedures to obtain the evidence on which an evaluationcan be based. Insofar as possible, the standards and related evidence must be quantified. The following description gives certain information (in italics) that internal auditors would know about or be able to determine on their own. Fulfilling the requirement thus amounts to taking some information from the scenario and figuring out other things by using accountants’ and auditors’ common sense.The ScenarioAce Corporation ships building materials to more than a thousand wholesale and retail customers in a five-state region. The company’s normal credit terms are net/30 days, and no cash discounts are offered. Fred Clark is the chief…