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: South-Western College Pub
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Question
Chapter 3, Problem 25MCQ
To determine
Introduction:Auditing means the inspection of financial accounts of the company to determine if the records are accurate as per the rules and regulations of accounting or not. There are two types of auditors, internal auditors and external auditors that carry out the
To choose: The correct answer.
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Students have asked these similar questions
Which one of the following is not included in the control environment?
a.
Integrity & Ethical values
b.
Organizational Structure
c.
Competence of Personnel
d.
External Auditor
Which among the following is not a principle relating to control activities?
a.
Management designs control activities to achieve its objectives.
b.
Management designs its information systems and related control activities to achieve its objectives and respond to risks.
c.
External auditor implements the control activities to achieve its objectives and respond to risks
d.
The agency implements control activities through policies and procedures.
Identify each of the following as a (a) purpose of an internal control system, (b) principle of internalcontrol,or (c) limitation of internal control. Uphold company policies
Chapter 3 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 3 - Prob. 1TFQCh. 3 - Prob. 2TFQCh. 3 - Prob. 3TFQCh. 3 - Prob. 4TFQCh. 3 - Prob. 5TFQCh. 3 - The control environment is seen as the foundation...Ch. 3 - Prob. 7TFQCh. 3 - Prob. 8TFQCh. 3 - Prob. 9TFQCh. 3 - Prob. 10TFQ
Ch. 3 - Prob. 11TFQCh. 3 - Prob. 12TFQCh. 3 - Prob. 13TFQCh. 3 - Prob. 14TFQCh. 3 - Prob. 15TFQCh. 3 - Prob. 16TFQCh. 3 - Prob. 17TFQCh. 3 - Prob. 18TFQCh. 3 - Prob. 19TFQCh. 3 - Prob. 20TFQCh. 3 - Prob. 21MCQCh. 3 - Prob. 22MCQCh. 3 - What are the components of internal control per...Ch. 3 - Prob. 24MCQCh. 3 - Prob. 25MCQCh. 3 - Which one of the following components of internal...Ch. 3 - Prob. 27MCQCh. 3 - Prob. 28MCQCh. 3 - Prob. 29MCQCh. 3 - Prob. 30MCQCh. 3 - Prob. 31MCQCh. 3 - Prob. 32MCQCh. 3 - Prob. 33MCQCh. 3 - Prob. 34MCQCh. 3 - Prob. 35MCQCh. 3 - Prob. 36MCQCh. 3 - Prob. 37MCQCh. 3 - Prob. 38MCQCh. 3 - Prob. 39MCQCh. 3 - Prob. 40MCQCh. 3 - Prob. 41RSCQCh. 3 - Prob. 42RSCQCh. 3 - Prob. 43RSCQCh. 3 - Prob. 44RSCQCh. 3 - Distinguish between entity-wide and transaction...Ch. 3 - Refer to Exhibit 3.2. List the principles...Ch. 3 - Prob. 47RSCQCh. 3 - Prob. 48RSCQCh. 3 - Prob. 49RSCQCh. 3 - Prob. 50RSCQCh. 3 - Refer to Exhibit 3.3. For each risk assessment...Ch. 3 - Prob. 52RSCQCh. 3 - Prob. 53RSCQCh. 3 - Prob. 54RSCQCh. 3 - Prob. 55RSCQCh. 3 - Prob. 56RSCQCh. 3 - Prob. 57RSCQCh. 3 - Prob. 58RSCQCh. 3 - Authorization of transactions is a key control in...Ch. 3 - Prob. 60RSCQCh. 3 - Prob. 61RSCQCh. 3 - Prob. 62RSCQCh. 3 - Prob. 63RSCQCh. 3 - Prob. 64RSCQCh. 3 - Prob. 65RSCQCh. 3 - Prob. 66RSCQCh. 3 - Prob. 67RSCQCh. 3 - Prob. 68RSCQCh. 3 - Refer to Exhibit 3.9. What are the important...Ch. 3 - Refer to Exhibit 3.10 and Exhibit 3.11. Describe...Ch. 3 - Prob. 71RSCQCh. 3 - Prob. 72RSCQCh. 3 - Prob. 73RSCQCh. 3 - Prob. 74RSCQCh. 3 - Assume that management is gathering evidence as...Ch. 3 - Prob. 76RSCQCh. 3 - Prob. 77RSCQCh. 3 - Prob. 78RSCQCh. 3 - Prob. 79FFCh. 3 - Diamond Foods, Inc. (LO 8, 9) In February 2012,...
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Similar questions
- What are the components of internal control per COSO’s Internal Control—Integrated Framework? a. Organizational structure, management philosophy, planning, risk assessment, and control activities. b. Control environment, risk assessment, control activities, information and communication, and monitoring. c. Risk assessment, control structure, backup facilities, responsibility accounting, and natural laws. d. Legal environment of the firm, management philosophy, organizational structure, control activities, and control assessment.arrow_forwardWhich of the following are affected by the quality of an organization’s internal controls? a. Reliability of financial data. b. Ability of management to make informed business decisions. c. Ability of the organization to remain ¡n business. d. All of the above. e. Only a and c.arrow_forwardIs an organization’s internal audit function part of its system of internal controls? If your answer is yes, explain how the internal audit function can evaluate the design adequacy and operating effectiveness of internal controls and at the same time remain independent of the organization’s system of internal controls. If your answer is no, explain the internal audit function’s role relative to the organization’s system of internal controls.arrow_forward
- Which of the following is NOT a requirement in management’s report on the effectiveness of internal controls over financial reporting?a. A statement of management’s responsibility for establishing and maintaining adequate internal control user satisfaction. b. A statement that the organization’s internal auditors have issued an attestation report on management’s assessment of the company’s internal controls. c. A statement identifying the framework management uses to conduct its assessment of internal controls. d. An explicit written conclusion as to the effectiveness of internal control over financial reporting.arrow_forwardThe attitudes and actions of those charged with governance concerning an entity's internal control is known as the entity's risk assessment process. O monitoring of controls. control activities. O the control environment.arrow_forwardWhich of the following is not an underlying principle related to risk assessment? OA. The organization should have clear objectives in order to be able to identify and assess the risks relating to the objectives. OB. The organization should monitor changes that could impact internal controls. OC. The organization should consider the potential for fraudulent behavior. OD. The auditors should determine how the company's risks should be managed.arrow_forward
- Reasonable assurance that the objectives of internal control are achieved depends on the competence and integrity of personnel. TRUE OR FALSE? WHY?arrow_forwardDistinguish management’s responsibility from the audit committee’s responsibility for designing and implementing antifraud programs and controlswithin a companyarrow_forwardWhich of the following is true of internal control? A. Internal control procedures tend to diminish the importance of operational efficiency. B. A company's outside auditor is responsible for the company's internal control system. C. Internal controls are only necessary for public companies. D. One of the major purposes of internal control is to ensure that the assets are safeguarded.arrow_forward
- 1. How does internal control impart on the achievement of organization’s goals? 2. Why risk management process is essential in addressing risks that the organization is facing? 3. Differentiate qualitative and quantitative assessment of risks.arrow_forwardIdentify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements in providing your response: Reasonable assurance • Planning and supervision • Materiality ⚫ Risk assessment • Audit evidence a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. b. Obtaining an understanding of the client's business and industry. c. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. d. Obtaining confirmations from the client's customers as to the ending balances in accounts receivable. e. Preparing a written audit plan. f. Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. g. Considering the likelihood that the account balance contains a material…arrow_forwardListed below are selected Rules of Conduct and ethical problems. Match the rule with the problem to which it applies. (One Rule of Conduct may apply to more than one ethical problem.) Rules A. Independence B. Integrity and objectivity C. General standards D. Compliance with standards E. Accounting principles F. Contingent fees G. Acts discreditable H. Advertising and other forms of solicitation I. Commissions and referral fees J. Form or practice and name Rules An audit client owes the CPA past-due audit fees. The auditors fail to qualify their opinion on financial statements that do not properly apply FASB standards. A CPA who is the controller for a company knowingly issues misleading financial statements. A CPA performs tax services that the CPA is not competent to perform. A sole practitioner practices in a partnership name. A member violates rules issued by the Accounting and Review Services Committee. A CPA robs a service station. A CPA accepts a percentage of the client's loan…arrow_forward
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