INTERNAL CONTROL AND COSO FRAMEWORK
Verified Quizzes + Top-Scoring Assignments | A+
Guaranteed| 100% correct
Which of the following is not one of the three primary objectives of effective internal control?
A) reliability of financial reporting
B) efficiency and effectiveness of operations
C) compliance with laws and regulations
D) assurance of elimination of business risk - D
With which of management's assertions with respect to implementing internal controls is the
auditor primarily concerned?
A) efficiency of operations
B) reliability of financial reporting
C) effectiveness of operations
D) compliance with applicable laws and regulations - B
Internal controls
A) are implemented by and are the responsibility of the auditors.
B) consist of policies and procedures designed to provide reasonable assurance that the
company achieves its objectives and goals.
C) guarantee that the company complies with all laws and regulations.
D) only apply to SEC companies. - B
Internal controls are not designed to provide reasonable assurance that
A) all frauds will be detected.
B) transactions are executed in accordance with management's authorization.
C) the company's resources are used efficiently and effectively.
D) company personnel comply with applicable rules and regulations. - A
,Who is responsible for establishing a private company's internal control?
A) senior management
B) internal auditors
C) FASB
D) audit committee - A
Two key concepts that underlie management's design and implementation of internal control
are
A) costs and materiality.
B) absolute assurance and costs.
C) inherent limitations and reasonable assurance.
D) collusion and materiality. - C
The PCAOB places responsibility for the reliability of internal controls over the financial
reporting process on
A) the company's board of directors.
B) the audit committee of the board of directors.
C) management.
D) the CFO and the independent auditors. - C
Which of the following parties provides an assessment of the effectiveness of internal control
over financial reporting for public companies?
I. MANAGEMENT
II. FINANCIAL STATEMENT AUDITORS
a. yes yes
b. no no
c. yes no
d. no yes - A
An act of two or more employees to steal assets and cover their theft by misstating the
accounting records would be referred to as
, A) collusion.
B) a material weakness.
C) a control deficiency.
D) a significant deficiency - A
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?
A) a statement that management is responsible for establishing and maintaining an adequate
internal control structure and procedures for financial reporting
B) 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
C) 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
D) a statement that the external auditors are solely responsible for establishing and maintaining
an adequate system of internal control - A
When management is evaluating the design of internal control, management evaluates whether
the control can do which of the following?
I. DETECT MATERIAL MISSTATEMENTS
II. CORRECT MATERIAL MISSTATEMENTS
a. yes yes
b. no no
c. yes no
d. no yes - C
When one material weakness is present at the end of the year, management of a public
company must conclude that internal control over financial reporting is
A) insufficient.
B) inadequate.
C) ineffective.
Verified Quizzes + Top-Scoring Assignments | A+
Guaranteed| 100% correct
Which of the following is not one of the three primary objectives of effective internal control?
A) reliability of financial reporting
B) efficiency and effectiveness of operations
C) compliance with laws and regulations
D) assurance of elimination of business risk - D
With which of management's assertions with respect to implementing internal controls is the
auditor primarily concerned?
A) efficiency of operations
B) reliability of financial reporting
C) effectiveness of operations
D) compliance with applicable laws and regulations - B
Internal controls
A) are implemented by and are the responsibility of the auditors.
B) consist of policies and procedures designed to provide reasonable assurance that the
company achieves its objectives and goals.
C) guarantee that the company complies with all laws and regulations.
D) only apply to SEC companies. - B
Internal controls are not designed to provide reasonable assurance that
A) all frauds will be detected.
B) transactions are executed in accordance with management's authorization.
C) the company's resources are used efficiently and effectively.
D) company personnel comply with applicable rules and regulations. - A
,Who is responsible for establishing a private company's internal control?
A) senior management
B) internal auditors
C) FASB
D) audit committee - A
Two key concepts that underlie management's design and implementation of internal control
are
A) costs and materiality.
B) absolute assurance and costs.
C) inherent limitations and reasonable assurance.
D) collusion and materiality. - C
The PCAOB places responsibility for the reliability of internal controls over the financial
reporting process on
A) the company's board of directors.
B) the audit committee of the board of directors.
C) management.
D) the CFO and the independent auditors. - C
Which of the following parties provides an assessment of the effectiveness of internal control
over financial reporting for public companies?
I. MANAGEMENT
II. FINANCIAL STATEMENT AUDITORS
a. yes yes
b. no no
c. yes no
d. no yes - A
An act of two or more employees to steal assets and cover their theft by misstating the
accounting records would be referred to as
, A) collusion.
B) a material weakness.
C) a control deficiency.
D) a significant deficiency - A
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?
A) a statement that management is responsible for establishing and maintaining an adequate
internal control structure and procedures for financial reporting
B) 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
C) 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
D) a statement that the external auditors are solely responsible for establishing and maintaining
an adequate system of internal control - A
When management is evaluating the design of internal control, management evaluates whether
the control can do which of the following?
I. DETECT MATERIAL MISSTATEMENTS
II. CORRECT MATERIAL MISSTATEMENTS
a. yes yes
b. no no
c. yes no
d. no yes - C
When one material weakness is present at the end of the year, management of a public
company must conclude that internal control over financial reporting is
A) insufficient.
B) inadequate.
C) ineffective.
