Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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Question
Chapter 3, Problem 34RQSC
To determine
Introduction: Internal control is a significant piece of each association. It helps in keeping up the effectiveness of the administration. It is an approach utilized by the administration to evade deceitful conduct and expanding responsibility in the association.
To explain: Significant deficiency and material weakness and the factors that are to be considered while assessing control deficiencies.
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Discuss the differences between a control deficiency, a significant deficiency, a material weakness, and the two dimensions of the control deficiency - likelihood and magnitude.
Which of the following is not an aspect of action control?
Select one:
O a. To define objectives
O b. To take corrective action
O c. To evaluate actual performance
O d. To compare actual performance with goals
7.8
Tralor Corporation manufactures and sells several different lines of small elec-
tric components. Its internal audit department completed an audit of its expen-
diture processes. Part of the audit involved a review of the internal accounting
controls for payables, including the controls over the authorization of transactions,
accounting for transactions, and the protection of assets. The auditors noted the
following items:
1. Routine purchases are initiated by inventory control notifying the purchasing de-
partment of the need to buy goods. The purchasing department fills out a prenum-
bered purchase order and gets it approved by the purchasing manager. The original
of the five-part purchase order goes to the vendor. The other four copies are for pur-
chasing, the user department, receiving for use as a receiving report, and accounts
payable.
2. For efficiency and effectiveness, purchases of specialized goods and services are ne-
gotiated directly between the user department and…
Chapter 3 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
Ch. 3 - Prob. 1CYBKCh. 3 - Prob. 2CYBKCh. 3 - Which of the following are affected by the quality...Ch. 3 - Prob. 4CYBKCh. 3 - Prob. 5CYBKCh. 3 - Prob. 6CYBKCh. 3 - What are the components of internal control per...Ch. 3 - Prob. 8CYBKCh. 3 - Prob. 9CYBKCh. 3 - The control environment is seen as the foundation...
Ch. 3 - Prob. 11CYBKCh. 3 - Which one of the following components of internal...Ch. 3 - Prob. 13CYBKCh. 3 - Prob. 14CYBKCh. 3 - Prob. 15CYBKCh. 3 - Prob. 16CYBKCh. 3 - Prob. 17CYBKCh. 3 - Prob. 18CYBKCh. 3 - Prob. 19CYBKCh. 3 - Prob. 20CYBKCh. 3 - Prob. 21CYBKCh. 3 - Prob. 22CYBKCh. 3 - Prob. 23CYBKCh. 3 - Prob. 24CYBKCh. 3 - Prob. 25CYBKCh. 3 - Prob. 26CYBKCh. 3 - Prob. 27CYBKCh. 3 - Prob. 28CYBKCh. 3 - Prob. 29CYBKCh. 3 - Prob. 30CYBKCh. 3 - Prob. 31CYBKCh. 3 - Prob. 32CYBKCh. 3 - Prob. 33CYBKCh. 3 - Prob. 34CYBKCh. 3 - Prob. 35CYBKCh. 3 - Prob. 36CYBKCh. 3 - Prob. 37CYBKCh. 3 - Prob. 38CYBKCh. 3 - Prob. 39CYBKCh. 3 - Prob. 40CYBKCh. 3 - Prob. 1RQSCCh. 3 - Prob. 2RQSCCh. 3 - Prob. 3RQSCCh. 3 - Prob. 4RQSCCh. 3 - Distinguish between entity-wide and transaction...Ch. 3 - Refer to Exhibit 3.2. List the principles...Ch. 3 - Prob. 7RQSCCh. 3 - Prob. 8RQSCCh. 3 - Prob. 9RQSCCh. 3 - Prob. 10RQSCCh. 3 - Refer to Exhibit 3.3. For each risk assessment...Ch. 3 - Prob. 12RQSCCh. 3 - Prob. 13RQSCCh. 3 - Prob. 14RQSCCh. 3 - Prob. 15RQSCCh. 3 - Prob. 16RQSCCh. 3 - Prob. 17RQSCCh. 3 - Prob. 18RQSCCh. 3 - Authorization of transactions is a key control in...Ch. 3 - Prob. 20RQSCCh. 3 - Prob. 21RQSCCh. 3 - Prob. 22RQSCCh. 3 - Prob. 23RQSCCh. 3 - Prob. 24RQSCCh. 3 - Prob. 25RQSCCh. 3 - Prob. 26RQSCCh. 3 - Prob. 27RQSCCh. 3 - Prob. 28RQSCCh. 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. 31RQSCCh. 3 - Prob. 32RQSCCh. 3 - Prob. 33RQSCCh. 3 - Prob. 34RQSCCh. 3 - Assume that management is gathering evidence as...Ch. 3 - Prob. 36RQSCCh. 3 - Prob. 37RQSCCh. 3 - Prob. 38RQSCCh. 3 - Prob. 39RQSCCh. 3 - Prob. 40RQSCCh. 3 - Prob. 39FFCh. 3 - Diamond Foods, Inc. (LO 8, 9) In February 2012,...
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Similar questions
- Describe how the nature of evidence used to evaluate the controlenvironment differs from the nature of evidence used to evaluate control activities.arrow_forwardShould an organization focus on controllable or uncontrollable factors to effectively implement a successful performance measurement system? Explain your answer.arrow_forwardWhat happens when Control Risk is assessed to be at the maximum level?arrow_forward
- When is the timing of substantive procedures most flexible? detection risk is assessed as low O there is a lack of an effective control environment O controls have been tested and are determined to be ineffective O controls have been tested and are determined to be effectivearrow_forwardMechanisms used for reporting non-compliance and identifying risk issues can include which of the following? O Balanced scorecard O Whistleblower hotline O Code of conduct O Environmental costingarrow_forwardAccording to Simon (1999) the most appropriate Lever of Control to address a lack of opportunity or fear of risk is? a. Interactive Control Systems. b. Belief Systems. C. Boundary Systems. d. Diagnostic Control Systems. e. Short- and Long-Term Incentive Systems.arrow_forward
- Which of the following is not a characteristic of a good performance measurement system? Group of answer choices A. timely B. consistent C. based on activities over which managers have no control or influence D. uses both long- and short-term performances and standardsarrow_forwardWhat is the purpose for a Control Environment assessment?arrow_forwardWhat are the costs of implementing a quality initiative, and what are the costs of not implementing one.arrow_forward
- Which of the following types of behavior is noted as the most common or frequent problems being observed by stakeholders? A. Externalizing behavior B. Internalizing behavior C. Inattentive behavior D. Impulsive behaviorarrow_forwardWhich of the following statements best describes the phrase, “evaluating the design of a control”? Group of answer choices A. Considering whether the control, individually or in combination with other controls, is capable of effectively preventing, or detecting and correcting, material misstatements. B. Expressing an opinion as to the effectiveness of a control. C. Observing the application of specific controls. D. Determining whether the control exists and that the entity is using it.arrow_forwardDescribe how the nature of evidence used to evaluate the control environment differs from the nature of evidence used to evaluate control activearrow_forward
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