ACC 544 Week 6 Quiz (Internal Controls)\t\u00a0\t\u00a0\t“\ufffd Question 1\u00a0\u00a0\u00a0 Which of the following payroll control activities would most effectively ensure that payment is made only for work performed?\t“\ufffd Question 2 \u00a0\u00a0 Effective internal control over the payroll function would include which of the following?\u00a0\t“\ufffd Question 3\u00a0\u00a0\u00a0 One of the auditor’s objectives in observing the actual distribution of payroll checks is to determine that every name on the payroll is that of a bona fide employee. The payroll observation is an auditing procedure that is generally performed for which of the following reasons?\t“\ufffd Question 4 \u00a0\u00a0 A large retail enterprise has established a policy which requires that the paymaster deliver all unclaimed payroll checks to the internal auditing department at the end of each payroll distribution day. This policy was most likely adopted in order to\t“\ufffd Question 5\u00a0\u00a0\u00a0 In the audit of which of the following types of profit-oriented enterprises would the auditor be most likely to place special emphasis on testing the controls over proper classification of payroll transactions?\t“\ufffd Question 6 \u00a0\u00a0 The reliance placed on substantive tests in relation to the reliance placed on internal control varies in a relationship that is ordinarily\t“\ufffd Question 7\u00a0\u00a0\u00a0 An auditor uses the assessed level of the risk of material misstatement to\t“\ufffd Question 8\u00a0\u00a0\u00a0 The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the\t“\ufffd Question 9\u00a0\u00a0\u00a0 An audit client failed to maintain copies of its procedures manuals and organizational flowcharts. What should the auditor do in an audit of financial statements?\t“\ufffd Question 10 As a result of tests of controls, an auditor assesses control risk too high.\u00a0 This incorrect assessment most likely occurred because\t“\ufffd Question 11 To provide assurance that each voucher is submitted and paid only once, an auditor most likely would examine a sample of paid vouchers and determine whether each voucher is\t“\ufffd Question 12 A client erroneously recorded a large purchase twice. Which of the following controls would be most likely to detect this error in a timely and efficient manner?\t“\ufffd Question 13\u00a0 A client’s materials-purchasing cycle begins with requisitions from user departments and ends with the receipt of materials and the recognition of a liability. An auditor’s primary objective in reviewing this cycle is to\t“\ufffd Question 14\u00a0 The company being audited has an internal auditor that is both competent and objective. The independent auditor wants to assign tasks for the internal auditor to perform. Under these circumstances, the independent auditor may\t“\ufffd Question 15\u00a0 An effective control that protects against the preparation of improper or inaccurate disbursements would be to require that all checks be\t“\ufffd Question 16\u00a0 During a financial statement audit an internal auditor may provide direct assistance to the independent CPA in performing\t“\ufffd Question 17\u00a0 When assessing internal auditors’ objectivity, an independent auditor should\t“\ufffd Question 18\u00a0 Which of the following factors most likely would assist an independent auditor in assessing the objectivity of the internal auditor?\t“\ufffd Question 19 Which of the following is the most effective control to detect vouchers that were prepared for the payment of goods that were not received?\t“\ufffd Question 20\u00a0 Miller Retailing, Inc. maintains a staff of three full-time internal auditors who report directly to the controller.\u00a0 In planning to use the internal auditors to provide assistance in performing the audit, the independent auditor most likely will\t“\ufffd Question 21 The accounts payable department receives the purchase order form to accomplish all of the following except\t“\ufffd Question 22\u00a0 The independent auditor should acquire an understanding of the internal audit function as it relates to the independent auditor’s consideration of internal control because\t“\ufffd Question 23 For effective internal control purposes, the vouchers payable department generally should\u00a0\t“\ufffd Question 24 For which of the following judgments may an independent auditor share responsibility with an entity’s internal auditor who is assessed to be both competent and objective?\t“\ufffd Question 25\u00a0 If the independent auditor decides that the work performed by internal auditors may have a bearing on the independent auditor’s own procedures, the independent auditor should consider the objectivity of the internal auditors.\u00a0 One method of judging objectivity is to\t“\ufffd Question 26 While obtaining an understanding of a client’s risk assessment policies, an auditor ordinarily considers how management\t“\ufffd Question 27 Management’s attitude toward aggressive financial reporting and its emphasis on meeting projected profit goals most likely would significantly influence an entity’s control environment when\t“\ufffd Question 28 Which of the following statements is correct regarding internal control?\t“\ufffd Question 29 Which of the following factors is most relevant when an auditor considers the client’s organizational structure in the context of control risk?\t“\ufffd Question 30\u00a0 Which of the following analytical procedures most likely would be used during the risk assessment stage of an audit?\t“\ufffd Question 31 Analytical procedures performed during the risk assessment phase of an audit should focus on\t“\ufffd Question 32 Which of the following is an analytical procedure that an auditor most likely would perform when performing the risk assessment of an audit?\u00a0\t“\ufffd Question 33 Which of the following most likely would cause an auditor to consider whether a client’s financial statements contain material misstatements?\t“\ufffd Question 34\u00a0 To help plan the nature, timing, and extent of substantive auditing procedures, preliminary analytical procedures should focus on\t“\ufffd Question 35 When a customer fails to include a remittance advice with a payment, it is a common practice for the person opening the mail to prepare one. Consequently, mail should be opened by which of the following four company employees?\t“\ufffd Question 36\u00a0 Which one of the following would the auditor consider to be an incompatible operation if the cashier receives remittances from the mailroom?\t“\ufffd Question 37 An auditor’s tests of controls for completeness for the revenue cycle usually include determining whether\t“\ufffd Question 38\u00a0 An auditor reviews a client’s accounting policies and procedures when considering which of the following planning matters?\t“\ufffd Question 39\u00a0 An entity with a large volume of customer remittances by mail could most likely reduce the risk of employee misappropriation of cash by using\t“\ufffd Question 40\u00a0 An auditor has identified the controller’s review of the bank reconciliation as a control to test. In connection with this test, the auditor interviews the controller to understand the specific data reviewed on the reconciliation. In addition, the auditor verifies that the bank reconciliation is properly prepared by the accountant and reviewed by the controller as evidenced by their respective sign-offs. Which of the following types of audit procedures do these actions illustrate?\t“\ufffd Question 41 Which of the following best represents a key control for ensuring sales are properly authorized when assessing control risks for sales?\t“\ufffd Question 42 An auditor who uses a transaction cycle approach to assessing control risk most likely would test control activities related to transactions involving the sale of goods to customers with the\t“\ufffd Question 43\u00a0 To determine whether internal control relative to the revenue cycle of a wholesaling entity is operating effectively in minimizing the failure to prepare sales invoices, an auditor most likely would select a sample of transactions from the population represented by the\u00a0\t“\ufffd Question 44 For effective internal control, the billing function should be performed by the\t“\ufffd Question 45\u00a0 At which point in an ordinary sales transaction of a wholesaling business would a lack of specific authorization be of least concern to the auditor in the conduct of an audit?\t“\ufffd Question 46\u00a0 Which of the following fraudulent activities most likely could be perpetrated due to the lack of effective internal control in the revenue cycle?\t“\ufffd Question 47 To verify that all sales transactions for which shipment has occurred have been recorded, a test of transactions should be completed on a representative sample drawn from\t“\ufffd Question 48\u00a0 After testing a client’s internal control activities, an auditor discovers a number of significant deficiencies in the operation of a client’s internal control.\u00a0 Under these circumstances the auditor most likely would\t“\ufffd Question 49\u00a0 Which of the following is true regarding significant deficiencies?\t“\ufffd Question 50\u00a0 During the audit the independent auditor identified the existence of a significant deficiency in the client’s internal control and communicated this finding in writing to the client’s management and to those charged with governance.\u00a0 The auditor should\t“\ufffd Question 51\u00a0 Which of the following statements is correct concerning an auditor’s communication on internal control related matters noted in an audit?\t“\ufffd Question 52\u00a0 Which of the following would not typically be a control relied upon during an audit?\u00a0\t“\ufffd Question 53 The auditor would be least likely to be concerned about internal control as it relates to\u00a0\t“\ufffd Question 54 When preparing a record of a client’s internal control, the independent auditor sometimes uses a flowchart, which can best be described as a\t“\ufffd Question 55 One important reason why a CPA, during the course of an audit engagement, prepares internal control flowcharts is to\t“\ufffd Question 56 In an audit of financial statements, an auditor’s primary consideration regarding a control is whether the control\t“\ufffd Question 57\u00a0 Effective internal control requires organizational independence of departments. Organizational independence would be impaired in which of the following situations?\t“\ufffd Question 58 An auditor would most likely be concerned with controls that provide reasonable assurance about the\t“\ufffd Question 59\u00a0 Proper segregation of functional responsibilities calls for separation of the\t“\ufffd Question 60 Which of the following sets of duties would ordinarily be considered basically incompatible in terms of good internal control?\t“\ufffd Question 61 A primary objective of procedures performed to obtain an understanding of internal control is to provide an auditor with\t“\ufffd Question 62\u00a0 Which of the following factors is most likely to affect the extent of the documentation of the auditor’s understanding of a client’s system of internal controls?\t“\ufffd Question 63\u00a0 Walk-throughs provide evidence that helps auditors to\t“\ufffd Question 64\u00a0 An auditor’s tests of controls over the issuance of raw materials to production would most likely include\t“\ufffd Question 65 Well functioning internal control for the inventory\/production functions would provide that finished goods are to be accepted for stock only after presentation of a completed production order and a(n)\t“\ufffd Question 66 Tests of controls are performed in order to determine whether\t“\ufffd Question 67\u00a0 Which of the following would be least likely to be included in an auditor’s tests of controls?\t“\ufffd Question 68 Which of the following is not a step in an auditor’s decision to conclude that controls operate effectively?\t“\ufffd Question 69\u00a0 When an auditor plans to rely on controls that have changed since they were last tested, which of the following courses of action would be most appropriate?\t“\ufffd Question 70 Which of the following is a step in an auditor’s decision to assess the risk of material misstatement at a low level by relying on controls?\t“\ufffd Question 71 A client maintains a large data center where access is limited to authorized employees.\u00a0 How may an auditor best determine the effectiveness of this control activity?\t“\ufffd Question 72 Which of the following is an inherent limitation of internal controls?\t“\ufffd Question 73 An independent auditor has concluded that the client’s records, procedures, and representation can be relied upon based on tests made during the year when internal control was found to be effective. The auditor should test the records, procedures, and representations again at year-end if\u00a0\t“\ufffd Question 74 When considering internal control to determine whether the necessary procedures are designed and operating effectively, an auditor must\t“\ufffd Question 75\u00a0 Which of the following is required documentation in an audit in accordance with generally accepted auditing standards?<\/p>\n","protected":false},"excerpt":{"rendered":"
ACC 544 Week 6 Quiz (Internal Controls) \u00a0 \u00a0 “\ufffd Question 1\u00a0\u00a0\u00a0 Which of the following payroll control activities would most effectively ensure that payment is made only for work performed? “\ufffd Question 2 \u00a0\u00a0 Effective internal control over the Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-199959","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/199959","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=199959"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/199959\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=199959"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=199959"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=199959"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}