What do documentation procedures and independent internal verification procedures have in commor O They are components of collusion that internal controls should be designed to prevent. O They are the components of internal control that are repeated most often ina voucher system. They are required by insurance companies in order to bond employees. They are reguired by external auditors in order to evaluate internal control systems.

What do documentation procedures and independent internal verification procedures have in commor O They are components of collusion that internal controls should be designed to prevent. O They are the components of internal control that are repeated most often ina voucher system. They are required by insurance companies in order to bond employees. They are reguired by external auditors in order to evaluate internal control systems.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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CPAs may audit around or through computers in the audit of the financial statements of clients who use IT to process accounting data. c. In auditing through the computer, CPAs may use test data. (1) What are test data? (2) Why do CPAs use test data?
CPAs may audit around or through computers in the examination of financial statements of clients who utilize computer to process accounting data. Required: Describe the auditing approach referred to as auditing around the computer.
Management and auditors are responsible for maintaining effective internal control system. * True False
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An Internal Control System will not Assists compliance with laws and regulations Helps ensure the reliability of internal and external reporting Help obtain an understanding of the business and the risks it faces Facilitates the effectiveness and efficiency of operations
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CPAs may audit around or through computers in the examination of financial statements of clients who utilize computer to process accounting data. Required: Under what condition does the CPA decide to audit through the computer instead of around the computer?
Obtaining an understanding of the internal control structure is required for first time audit client, but not necessary for recurring clients. TRUE OR FALSE? WHY?
Allowing only certain employees to order goods and services for the company is an example of what internal control procedure? a.Proper authorization b.Independent verification c.Segregation of duties d.Safeguarding of assets and records
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CPAs may audit around or through computers in the audit of the financial statements of clients who use IT to process accounting data. d. How can the CPAs be satisfied that the computer programs presented to them for testing are actually those used by the client for processing accounting data?