Auditing test bank chapter 10

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1、AuditingandAssuranceServices,15e(Arens)Chapter10InternalControl,ControlRisk,andSection404AuditsLearningObjective10-11)Whichofthefollowingisnotoneofthethreeprimaryobjectivesofeffectiveinternalcontrol?A)ReliabilityoffinancialreportingB)Efficiencyandeffect

2、ivenessofoperationsC)CompliancewithlawsandregulationsD)AssuranceofeliminationofbusinessriskAnswer:DTerms:InternalcontrolobjectivesDiff:EasyObjective:LO10-1AACSB:Analyticskills2)Whichofmanagement'sassertionswithrespecttoimplementinginternalcontrolsisthea

3、uditorprimarilyconcerned?A)EfficiencyofoperationsB)ReliabilityoffinancialreportingC)EffectivenessofoperationsD)CompliancewithapplicablelawsandregulationsAnswer:BTerms:Management'sassertionsDiff:EasyObjective:LO10-1AACSB:Reflectivethinkingskills3)Interna

4、lcontrols:A)areimplementedbyandaretheresponsibilityoftheauditors.B)consistofpoliciesandproceduresdesignedtoprovidereasonableassurancethatthecompanyachievesitsobjectivesandgoals.C)guaranteethatthecompanycomplieswithalllawsandregulations.D)onlyapplytoSECc

5、ompanies.Answer:BTerms:InternalcontrolDiff:ModerateObjective:LO10-1AACSB:Analyticskills40Copyright©2014PearsonEducation,Inc.4)Internalcontrolsarenotdesignedtoprovidereasonableassurancethat:A)allfraudswillbedetected.B)transactionsareexecutedinaccordancew

6、ithmanagement'sauthorization.C)thecompany'sresourcesareusedefficientlyandeffectively.D)companypersonnelcomplywithapplicablerulesandregulations.Answer:ATerms:Internalcontrols;reasonableassuranceDiff:ModerateObjective:LO10-1AACSB:Analyticskills5)Describee

7、achofthethreebroadobjectivesmanagementtypicallyhasforinternalcontrol.Withwhichoftheseobjectivesistheauditorprimarilyconcerned?Answer:Thethreeobjectivesare:•Reliabilityoffinancialreporting.Managementhasbothalegalandprofessionalresponsibilitytobesurethatt

8、heinformationisfairlypresentedinaccordingwithreportingrequirementssuchasU.S.GAAPandIFRS.•Efficiencyandeffectivenessofoperations.Controlswithinanorganizationaremeanttoencourageefficientandeffectiveuseofitsresourcestooptimizethecom