Podcast
Questions and Answers
What is not considered an inherent limitation of the potential effectiveness of an entity’s internal control?
What is not considered an inherent limitation of the potential effectiveness of an entity’s internal control?
- Collusion among employees
- Mistakes in judgment (correct)
- Incompatible duties
- Management override
What is the concept of reasonable assurance in internal control based on?
What is the concept of reasonable assurance in internal control based on?
- Cost of internal control should not exceed benefits (correct)
- Internal control being ineffective due to mistakes in judgment
- Adequate safeguards over access to assets and records
- Responsibility of management in establishing internal control
What does proper segregation of functional responsibilities call for?
What does proper segregation of functional responsibilities call for?
- Authorization, recording, and custody (correct)
- Custody, execution, and reporting
- Authorization, payment, and recording
- Authorization, execution, and payment
What is commonly included in an entity’s ongoing monitoring activities?
What is commonly included in an entity’s ongoing monitoring activities?
The overall attitude of an entity’s board of directors towards internal control is usually reflected in what aspect?
The overall attitude of an entity’s board of directors towards internal control is usually reflected in what aspect?
Which activity is considered a major component of internal control according to the text?
Which activity is considered a major component of internal control according to the text?
What factor would most likely have a significant influence on an entity's control environment?
What factor would most likely have a significant influence on an entity's control environment?
Which factors are included in an entity's control environment?
Which factors are included in an entity's control environment?
Which of the following is NOT a component of an entity's internal control?
Which of the following is NOT a component of an entity's internal control?
Which provision is part of the Foreign Corrupt Practices Act?
Which provision is part of the Foreign Corrupt Practices Act?
In gathering evidence regarding fraud involving unauthorized merchandise purchases, what would the auditor most likely select for testing?
In gathering evidence regarding fraud involving unauthorized merchandise purchases, what would the auditor most likely select for testing?
What type of procedure would most likely provide evidence to detect fraud involving merchandise purchases?
What type of procedure would most likely provide evidence to detect fraud involving merchandise purchases?
