ACC 403 Final Assessment Comprehensive Auditing and Internal Control Exam
Final assessment covering auditing and internal control concepts.
Lily Green
Contributor
4.2
32
about 1 month ago
Preview (5 of 16)
Sign in to access the full document!
ACC 403 Final Assessment Comprehensive Auditing and Internal Control Exam
Question 1
When taken together, the concepts of risk and materiality in auditing:
Answer
measure the uncertainty of amounts of a given magnitude.
measure uncertainty only.
measure magnitude only.
measure inherent risk.
Question 2
Auditing standards ________ that the basis used to determine the preliminary judgment about
materiality be documented in the audit files.
Answer
permit
do not allow
require
strongly encourage
Question 3
Auditors are ________ to document the known and likely misstatements in the financial
statements under audit.
Answer
permitted
required
not allowed
strongly encouraged
Question 4
________ misstatements are those where the auditor can determine the amount of the
misstatement in the account.
Answer
Potential
Likely
Known
Projected
Question 5
Inherent risk is ________ related to detection risk and ________ related to the amount of audit
evidence.
Answer
directly, inversely
directly, directly
inversely, inversely
Question 1
When taken together, the concepts of risk and materiality in auditing:
Answer
measure the uncertainty of amounts of a given magnitude.
measure uncertainty only.
measure magnitude only.
measure inherent risk.
Question 2
Auditing standards ________ that the basis used to determine the preliminary judgment about
materiality be documented in the audit files.
Answer
permit
do not allow
require
strongly encourage
Question 3
Auditors are ________ to document the known and likely misstatements in the financial
statements under audit.
Answer
permitted
required
not allowed
strongly encouraged
Question 4
________ misstatements are those where the auditor can determine the amount of the
misstatement in the account.
Answer
Potential
Likely
Known
Projected
Question 5
Inherent risk is ________ related to detection risk and ________ related to the amount of audit
evidence.
Answer
directly, inversely
directly, directly
inversely, inversely
inversely, directly
Question 6
Management must disclose material weaknesses in internal control in its audit report:
Answer
whenever the weakness is deemed significant to a single class of transactions.
whenever the weakness is significant to overall financial reporting objectives.
if the weakness exists at the end of the year.
only if the auditor identifies the weakness as significant.
Question 7
Which of the following deficiency exists if a necessary control is missing or not properly
formulated?
Answer
Control
Significant
Design
Operating
Question 8
An act of two or more employees to steal assets and cover their theft by misstating the
accounting records would be referred to as:
Answer
collusion.
a material weakness.
a control deficiency.
a significant deficiency
Question 9
Sarbanes-Oxley requires management to issue an internal control report that includes two
specific items. Which of the following is one of these two requirements?
Answer
A statement that management is responsible for establishing and maintaining an adequate
internal control structure and procedures for financial reporting
A statement that management and the board of directors are jointly responsible for establishing
and maintaining an adequate internal control structure and procedures for financial reporting
A statement that management, the board of directors, and the external auditors are jointly
responsible for establishing and maintaining an adequate internal control structure and
procedures for financial reporting
A statement that the external auditors are solely responsible
Question 10
Which of the following components of the control environment define the existing lines of
responsibility and authority?
Answer
Question 6
Management must disclose material weaknesses in internal control in its audit report:
Answer
whenever the weakness is deemed significant to a single class of transactions.
whenever the weakness is significant to overall financial reporting objectives.
if the weakness exists at the end of the year.
only if the auditor identifies the weakness as significant.
Question 7
Which of the following deficiency exists if a necessary control is missing or not properly
formulated?
Answer
Control
Significant
Design
Operating
Question 8
An act of two or more employees to steal assets and cover their theft by misstating the
accounting records would be referred to as:
Answer
collusion.
a material weakness.
a control deficiency.
a significant deficiency
Question 9
Sarbanes-Oxley requires management to issue an internal control report that includes two
specific items. Which of the following is one of these two requirements?
Answer
A statement that management is responsible for establishing and maintaining an adequate
internal control structure and procedures for financial reporting
A statement that management and the board of directors are jointly responsible for establishing
and maintaining an adequate internal control structure and procedures for financial reporting
A statement that management, the board of directors, and the external auditors are jointly
responsible for establishing and maintaining an adequate internal control structure and
procedures for financial reporting
A statement that the external auditors are solely responsible
Question 10
Which of the following components of the control environment define the existing lines of
responsibility and authority?
Answer
Preview Mode
Sign in to access the full document!
100%
Study Now!
XY-Copilot AI
Unlimited Access
Secure Payment
Instant Access
24/7 Support
Document Chat
Document Details
University
Strayer University
Subject
Accounting