Auditing Gleim Final questions well
answered
The primary objective of procedures performed to obtain an understanding of internal control is
to provide an auditor with - correct answer ✔✔Knowledge necessary for audit planning.
In an audit of financial statements, an auditor's primary consideration regarding an internal
control is whether the control - correct answer ✔✔Affects management's financial statement
assertions.
An auditor uses the knowledge provided by the understanding of internal control and the
assessed risks of material misstatement primarily to - correct answer ✔✔Determine the nature,
timing, and extent of substantive procedures for financial statement assertions.
Internal control can provide only reasonable assurance of achieving an entity's control
objectives. The likelihood of achieving those objectives is affected by which limitation inherent
to internal control? - correct answer ✔✔The cost of internal control should not exceed its
benefits.
Which of the following statements is correct regarding internal control? - correct answer ✔✔An
inherent limitation of internal control is that controls can be circumvented by management
override.
Internal controls are designed to provide reasonable assurance that - correct answer
✔✔Material errors or fraud will be prevented, or detected and corrected, within a timely period
by employees in the course of performing their assigned duties.
Which of the following is not a component of internal control? - correct answer ✔✔Control risk.
, Proper segregation of duties reduces the opportunities to allow persons to be in positions both
to - correct answer ✔✔Perpetrate and conceal fraud and error.
It is important for the auditor to consider the competence of the audit client's employees,
because their competence bears directly and importantly upon the - correct answer
✔✔Achievement of the objectives of internal control.
The control environment may decrease the effectiveness of control activities when - correct
answer ✔✔Management has substantial incentives for meeting earnings projections.
Which of the following is the best way to compensate for the lack of adequate segregation of
duties in a small organization? - correct answer ✔✔Allowing for greater management oversight
of incompatible activities.
Which of the following components of internal control would be considered the foundation for
the other components? - correct answer ✔✔Control environment.
The auditor's understanding of internal control is documented to substantiate - correct answer
✔✔Compliance with generally accepted auditing standards.
After obtaining an understanding of the entity and its environment, including its internal
control, the auditor assesses - correct answer ✔✔Control risk and inherent risk to determine
the acceptable level of detection risk.
An auditor most likely requires an understanding of IT in an attest engagement to - correct
answer ✔✔Determine the effect of IT on the audit.
Samples to test controls are intended to provide a basis for an auditor to conclude whether -
correct answer ✔✔The controls are operating effectively.
answered
The primary objective of procedures performed to obtain an understanding of internal control is
to provide an auditor with - correct answer ✔✔Knowledge necessary for audit planning.
In an audit of financial statements, an auditor's primary consideration regarding an internal
control is whether the control - correct answer ✔✔Affects management's financial statement
assertions.
An auditor uses the knowledge provided by the understanding of internal control and the
assessed risks of material misstatement primarily to - correct answer ✔✔Determine the nature,
timing, and extent of substantive procedures for financial statement assertions.
Internal control can provide only reasonable assurance of achieving an entity's control
objectives. The likelihood of achieving those objectives is affected by which limitation inherent
to internal control? - correct answer ✔✔The cost of internal control should not exceed its
benefits.
Which of the following statements is correct regarding internal control? - correct answer ✔✔An
inherent limitation of internal control is that controls can be circumvented by management
override.
Internal controls are designed to provide reasonable assurance that - correct answer
✔✔Material errors or fraud will be prevented, or detected and corrected, within a timely period
by employees in the course of performing their assigned duties.
Which of the following is not a component of internal control? - correct answer ✔✔Control risk.
, Proper segregation of duties reduces the opportunities to allow persons to be in positions both
to - correct answer ✔✔Perpetrate and conceal fraud and error.
It is important for the auditor to consider the competence of the audit client's employees,
because their competence bears directly and importantly upon the - correct answer
✔✔Achievement of the objectives of internal control.
The control environment may decrease the effectiveness of control activities when - correct
answer ✔✔Management has substantial incentives for meeting earnings projections.
Which of the following is the best way to compensate for the lack of adequate segregation of
duties in a small organization? - correct answer ✔✔Allowing for greater management oversight
of incompatible activities.
Which of the following components of internal control would be considered the foundation for
the other components? - correct answer ✔✔Control environment.
The auditor's understanding of internal control is documented to substantiate - correct answer
✔✔Compliance with generally accepted auditing standards.
After obtaining an understanding of the entity and its environment, including its internal
control, the auditor assesses - correct answer ✔✔Control risk and inherent risk to determine
the acceptable level of detection risk.
An auditor most likely requires an understanding of IT in an attest engagement to - correct
answer ✔✔Determine the effect of IT on the audit.
Samples to test controls are intended to provide a basis for an auditor to conclude whether -
correct answer ✔✔The controls are operating effectively.
