Podcast
Questions and Answers
What is the main reason an auditor may follow the Substantive strategy (setting control risk high)?
What is the main reason an auditor may follow the Substantive strategy (setting control risk high)?
- To avoid having a good understanding of internal controls
- To not rely on entity's controls but still understand the internal controls (correct)
- To ensure efficiency in the audit process
- To rely on entity's controls
Which limitation of an entity's internal control involves senior management forcing lower level employees to violate controls?
Which limitation of an entity's internal control involves senior management forcing lower level employees to violate controls?
- Reliance Strategy
- Human Errors or Mistakes
- Management Override of Internal Control (correct)
- Collusions
In the context of an audit, what can cause system errors when humans are involved in designing, maintaining, or monitoring?
In the context of an audit, what can cause system errors when humans are involved in designing, maintaining, or monitoring?
- Collusions
- Reliance on entity's controls
- Human Errors or Mistakes (correct)
- Segregation of duties
Why can segregation of duties be inefficient in the presence of collusions?
Why can segregation of duties be inefficient in the presence of collusions?
What strategy involves setting control risk at a lower level and relying on entity's internal control?
What strategy involves setting control risk at a lower level and relying on entity's internal control?
What is the main purpose of performing tests of controls during an audit?
What is the main purpose of performing tests of controls during an audit?
Which of the following is NOT one of the 4 types of tests performed to assess control risk?
Which of the following is NOT one of the 4 types of tests performed to assess control risk?
What determines the extent of substantive procedures required during an audit?
What determines the extent of substantive procedures required during an audit?
What is the primary focus of reports about controls at an external source (service organization)?
What is the primary focus of reports about controls at an external source (service organization)?
Which type of controls are concerned with preventing errors and ensuring accuracy in transactions?
Which type of controls are concerned with preventing errors and ensuring accuracy in transactions?
