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Internal Conttol Part 3

The document discusses audit procedures for assessing control risks. It contains multiple choice questions about obtaining evidence of segregation of duties and making preliminary assessments of control risk. The best way to obtain evidence of segregation of duties is by observing employees apply specific controls. After obtaining an understanding of accounting and internal control systems, the auditor should make a preliminary assessment of control risk at the assertion level.

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67 views1 page

Internal Conttol Part 3

The document discusses audit procedures for assessing control risks. It contains multiple choice questions about obtaining evidence of segregation of duties and making preliminary assessments of control risk. The best way to obtain evidence of segregation of duties is by observing employees apply specific controls. After obtaining an understanding of accounting and internal control systems, the auditor should make a preliminary assessment of control risk at the assertion level.

Uploaded by

Jane
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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7.

Audit evidence concerning segregation of duties ordinarily is best obtained by


a. Performing tests of transactions that corroborate management’s financial
statement assertions
b. Observing the employees as they apply specific controls.
c. Obtaining a flowchart of activities performed by available personnel.
d. Developing audit objectives that reduce control risk.

8. Which of the following statements about preliminary assessment of control


risks is correct?
a. After obtaining an understanding of the accounting and internal control
systems, the auditor should make a preliminary assessment of control risks,
at the assertion level, for all accounts or transaction classes.
b. The preliminary assessment of control risk can be done only after completing
tests of controls.
c. The preliminary assessment of control risk for a financial assertion is normally
low, unless the auditor is able to identify weaknesses that may indicate
ineffectiveness of accounting and internal control system.
d. The auditor ordinarily assesses control risk at high level for some or all
assertions when it is not cost efficient to do tests of controls.
9. Audit evidence concerning segregation of duties ordinarily is best obtained by
a. Performing tests of transactions that corroborate management’s financial
statement assertions
b. Observing the employees as they apply specific controls.
c. Obtaining a flowchart of activities performed by available personnel.
d. Developing audit objectives that reduce control risk.

10. Which of the following statements about preliminary assessment of control


risks is correct?
a. After obtaining an understanding of the accounting and internal control
systems, the auditor should make a preliminary assessment of control risks,
at the assertion level, for all accounts or transaction classes.
b. The preliminary assessment of control risk can be done only after completing
tests of controls.
c. The preliminary assessment of control risk for a financial assertion is normally
low, unless the auditor is able to identify weaknesses that may indicate
ineffectiveness of accounting and internal control system.
d. The auditor ordinarily assesses control risk at high level for some or all
assertions when it is not cost efficient to do tests of controls.

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