Test Prep This preview shows page 22 - 24 out of 57 pages. Source: OriginalTopic: Components of Internal Control4.When an auditor plans to rely on controls that have changed since they were lasttested, which of the following courses of action would be most appropriate?A.Test the operating effectiveness of such controls in thecurrent audit.B.Document that reliance and proceed with the original auditstrategy.C.Inquire of management as to the effectiveness of thecontrols.D.Report the reliance in the report on internalcontrols.Learning Objective: 05-04 Explain the process the audit team uses to assess control risk; understand its impacton the risk of material misstatement; and; ultimately; to know how it affects the nature; timing; and extent offurther audit procedures to be performed on the audit.AACSB: AnalyticAICPA: BB LegalAICPA: FN ResearchAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 3 HardSource: AICPA Topic: Internal Control Evaluation5-22 We have textbook solutions for you! The document you are viewing contains questions related to this textbook. College Accounting, Chapters 1-27 Heintz/Parry Expert Verified
5.An auditor is concerned about a policy of management override as a limitation ofinternal control. Which of the following tests would best assess the validity of theauditor's concern? Get answer to your question and much more AACSB: AnalyticAICPA: BB LegalAICPA: FN ResearchAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 2 MediumLearning Objective: 05-04 Explain the process the audit team uses to assess control risk; understand its impacton the risk of material misstatement; and; ultimately; to know how it affects the nature; timing; and extent offurther audit procedures to be performed on the audit.Source: AICPATopic: Internal Control Evaluation6.Which of the following activities performed by a department supervisor most likelywould help in the prevention or detection of a payroll fraud? Get answer to your question and much more AACSB: AnalyticAICPA: BB LegalAICPA: FN ResearchAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 3 HardLearning Objective: 05-04 Explain the process the audit team uses to assess control risk; understand its impacton the risk of material misstatement; and; ultimately; to know how it affects the nature; timing; and extent offurther audit procedures to be performed on the audit.Source: AICPATopic: Internal Control Evaluation5-23 Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 57 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. College Accounting, Chapters 1-27 Heintz/Parry Expert Verified When an auditor plans to rely on controls that have changed since they were last tested which of the following courses of action?41 If the auditor plans to rely on controls that have changed since they were last tested, the auditor should test the operating effectiveness of such controls in the current audit.
What is the most likely course of action that an auditor would take after?What is the most likely course of action that an auditor would take after determining that performing substantive procedures on inventory will take less time than performing tests of controls? Perform only substantive procedures on inventory.
How does an auditor decides which controls to test?The auditor should test the operating effectiveness of a control selected for testing by determining whether the control is operating as designed and whether the person performing the control possesses the necessary authority and competence to perform the control effectively.
Which of the following would an auditor most likely consider in evaluating the control environment of an audit client?Risk assessment. Which of the following would an auditor most likely consider in evaluating the control environment of an audit client? Management's operating style.
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When auditor plans to rely on controls that have changed since they were last tested which of the following courses of action would be most appropriate?
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