LSUS MBA 715 - Exam 2 QUESTIONS AND ANSWERS
A deficiency that implies d. a significant deficiency.
that there is a reasonable
possibility of misstatement
in the financial statements
that is significant but not
material is:
a. an insignificant deficiency.
b. a material weakness.
c. a probable deficiency.
d. a significant deficiency.
According to the PCAOB, a. the entity's CEO and/or CFO
who is responsible for
certifying the reliability of
the internal controls over
financial reporting
process of an entity?
a. the entity's CEO and/or CFO
b. an internal control specialist
c. the external auditor
d. the entity's board of
directors
,An auditor would most likely c. entity's ability to accurately process and summarize financial
be concerned with internal data.
control policies and
procedures that provide
reasonable assurance
about the:
a. efficiency of
management's decision-
making process.
b. appropriate prices that
the entity should charge
for its products.
c. entity's ability to
accurately process and
summarize financial data.
d. methods of assigning
production tasks to
employees.
An entity's control activities d. external auditor's tests of controls.
include all of the following
except:
a. informationprocessing.
b. segregation of duties.
c. performance reviews.
d. external auditor's tests of
controls.
Auditors are most likely to a. if the implemented controls are assessed as ineffective.
gather audit evidence
solely using substantive
procedures:
a. if the implemented
controls are assessed as
ineffective.
b. if the entity has a
well-designed
automated system.
c. if control risk is very low.
, d. if
transactions are recurring.
Factors that the auditor a. It is comprised almost exclusively of members of
should consider as management, ensuring detailed knowledge of the
increasing the company's operations.
effectiveness of the audit
committee include all of
the following except:
a. It is comprised almost
exclusively of members
of management,
ensuring detailed
knowledge of the
company's operations.
b. It is independent of
management.
c. It interacts regularly with
internal audit personnel.
d. It asks management difficult
questions.
A deficiency that implies d. a significant deficiency.
that there is a reasonable
possibility of misstatement
in the financial statements
that is significant but not
material is:
a. an insignificant deficiency.
b. a material weakness.
c. a probable deficiency.
d. a significant deficiency.
According to the PCAOB, a. the entity's CEO and/or CFO
who is responsible for
certifying the reliability of
the internal controls over
financial reporting
process of an entity?
a. the entity's CEO and/or CFO
b. an internal control specialist
c. the external auditor
d. the entity's board of
directors
,An auditor would most likely c. entity's ability to accurately process and summarize financial
be concerned with internal data.
control policies and
procedures that provide
reasonable assurance
about the:
a. efficiency of
management's decision-
making process.
b. appropriate prices that
the entity should charge
for its products.
c. entity's ability to
accurately process and
summarize financial data.
d. methods of assigning
production tasks to
employees.
An entity's control activities d. external auditor's tests of controls.
include all of the following
except:
a. informationprocessing.
b. segregation of duties.
c. performance reviews.
d. external auditor's tests of
controls.
Auditors are most likely to a. if the implemented controls are assessed as ineffective.
gather audit evidence
solely using substantive
procedures:
a. if the implemented
controls are assessed as
ineffective.
b. if the entity has a
well-designed
automated system.
c. if control risk is very low.
, d. if
transactions are recurring.
Factors that the auditor a. It is comprised almost exclusively of members of
should consider as management, ensuring detailed knowledge of the
increasing the company's operations.
effectiveness of the audit
committee include all of
the following except:
a. It is comprised almost
exclusively of members
of management,
ensuring detailed
knowledge of the
company's operations.
b. It is independent of
management.
c. It interacts regularly with
internal audit personnel.
d. It asks management difficult
questions.
