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This preview shows page 22 - 25 out of 25 pages. 2) When auditing a private company, the auditor should obtain an understanding of internalcontrol sufficient to:A) provide reasonable protection against client fraud and defalcations by client employees.B) assess control risk.C) provide a basis for suggestions to the client for improving the accounting system.D) provide a method for safeguarding assets, checking the accuracy and reliability of accountingdata, promoting operational efficiency, and encouraging adherence to prescribed managerialpolicies. 3) In the audit of a private company, the auditor will test internal controls when control risk isinitially assessed at: Get answer to your question and much more 4) The auditor's consideration of a private company's internal control is:22 We have textbook solutions for you! The document you are viewing contains questions related to this textbook. Fraud Examination Albrecht/Albrecht Expert Verified Get answer to your question and much more 5) Which of the following may represent the biggest challenge smaller public companies face inimplementing effective internal control? Get answer to your question and much more 6) Which of the following is most correct for audits of non-public companies?A) An audit of internal control is required.B) An audit of internal control is not required.C) An audit of the design of internal controls is required.D) An audit of the operational effectiveness of internal controls is required. 7) Match seven of the terms (a-i) with the definitions provided below (1-7):a.Control environmentb.Control activitiesc.Independent checks on performanced.Internal controle.Monitoringf.Separation of dutiesg.General authorizationh.Specific authorizationi.Risk assessment________ 1. Management's ongoing and periodic assessment of the quality of internal controlperformance to determine that controls are operating as intended and are modified when needed.________ 2. Company-wide policies for the approval of all transactions within stated limits.________ 3. The actions, policies, and procedures that reflect the overall attitudes of topmanagement, directors, and owners of an entity about internal control and its importance to theentity.________ 4. Segregation of the following activities in an organization: custody of assets,accounting, authorization, and operational responsibility.________ 5. Management's identification and analysis of risks relevant to the preparation offinancial statements in accordance with an applicable accounting framework.________ 6. Policies and procedures that help ensure that necessary actions are taken to addressrisks in the achievement of the entity's objectives.________ 7. A process designed to provide reasonable assurance regarding the achievement ofmanagement's objectives in the following categories: (1) reliability of financial reporting, (2)effectiveness and efficiency of operations, and (3) compliance with applicable laws andregulations. Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 25 pages? Upload your study docs or become a Course Hero member to access this document We have textbook solutions for you!The document you are viewing contains questions related to this textbook. The document you are viewing contains questions related to this textbook. Fraud Examination Albrecht/Albrecht Expert Verified For what reasons does an auditor obtain an understanding of the internal control structure?The auditor uses the understanding of internal control to identify types of potential misstatements, consider factors that affect the risks of material misstatement, and design the nature, timing, and extent of further audit procedures.
Who is responsible to obtain an understanding of internal control?Management is responsible for establishing internal controls. In order to maintain effective internal controls, management should: Maintain adequate policies and procedures; Communicate these policies and procedures; and.
When assessing the competence of the internal auditors An auditor should obtain information about the?When assessing the competence of the internal auditors, an independent CPA should obtain information about the: quality of the internal auditors' working-paper documentation.
What are the procedures used to obtain an understanding of internal control?Examples include organization charts, policy manuals, the chart of accounts, accounting ledgers, journals and source documents, transaction flowcharts and reports used by management in performance reviews such as comparative reports showing actual and budgeted data and variances.
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