ACC 410 QUIZ 5 (3)

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1.

An audit procedure that would most likely be used by an auditor in performing tests of
control procedures in which the segregation of functions and that leaves no "audit" trail is:

2.

A five-step approach can be used to identify deficiencies, significant deficiencies, and

material weaknesses. The first step in this approach is:

3.

Internal controls normally include procedures designed to provide reasonable assurance

that:

4.

Internal controls can never be regarded as completely effective. Even if company personnel
could design an ideal system, its effectiveness depends on the:

5.

Two key concepts that underlie management's design and implementation of internal control
are:

6.

The PCAOB places responsibility for the reliability of internal controls over the financial
reporting process on:

7.

Reasonable assurance allows for:

8.

Which of the following is not one of the three primary objectives of effective internal control?

9.

Proper segregation of functional responsibilities calls for separation of:

10.

Which of management's assertions with respect to implementing internal controls is the

auditor primarily concerned?

11.

When considering internal controls, an important point to consider is that:

12.

Which of the following is responsible for establishing a private company's internal control?

13.

14.
15.

Which of the following activities would be least likely to strengthen a company's internal
control?
Narratives, flowcharts, and internal control questionnaires are three common methods of:
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?

16.

Which of the following best defines fraud in a financial statement auditing context?

17.

Financial statement manipulation risk is arguably present for all companies' financial
statements. However, the risk is elevated for companies that:

18.

Analytical procedures can be very effective in detecting inventory fraud. Which of the
following analytical procedures would not be useful in detecting fraud?

19.

A company is concerned with the theft of cash after the sale has been recorded. One way in
which fraudsters conceal the theft is by a process called "lapping." Which of the following best
describes lapping?

20.
21.

22.
23.

In the fraud triangle, fraudulent financial reporting and misappropriation of assets:

Auditing standards specifically require auditors to identify ________ as a fraud risk in most
audits.
When assessing the risk for fraud, the auditor must be cognizant of the fact that:
Which party has the primary responsibility to oversee an organization's financial reporting
and internal control process?

24.

When analyzing accounts for fraud risk:

25.

Research indicates that the most effective way to prevent and deter fraud is to:

26.

27.
28.

29.
30.

1.

Which of the following questions is the auditor not required to ask company management
when assessing fraud risk?
Most cases of fraudulent reporting involve:
Which of the following is a factor that relates to attitudes or rationalization to commit
fraudulent financial reporting?
Fraud awareness training should be:
Which of the following parties is responsible for implementing internal controls to minimize
the likelihood of fraud?