When completing the audit of internal controls for a public company, AS 2201 requires auditors to test Show  Q: When testing a control activity’s operating effectiveness, procedures the auditor performs totest… A: The answer is provided as follows: Q: When completing the audit of internal controls for a public company the PCAOB requires auditors to… A: PCAOB (Public Company Accounting Oversight Board) - It is the non profit organization that regulates… Q: The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either… A: Answer is False , Q: In the integrated audit of an issuer, which of the following would not be considered an entity-level… A: Internal control is the managements’ effective and efficient controls for achieving goals and… Q: The primary purpose for obtaining an understanding of a nonpublic audit client’s internal control is… A: Generally accepted auditing standards (GAAS): These are defined as the set of general principles and… Q: For each of the above deficiencies, identify the possible impact on the company’s operation and… A: Internal control is a system of organizing the company in which a set of rules, policies, and… Q: Which of the following is least likely to be used as evidence by an external auditor?a. Substantive… A: Auditor is the person who is responsible for the identify the error and fraud presented in the… Q: When planning the audit, the auditor should make inquiries of management in order to do the… A: Inquiry is an audit procedure that is used extensively throughout the audit and often is… Q: The auditor shall communicate with those charged with governance an overall approach and scope of… A: During the course of the audit, the auditor finds the material misstatements, accounting errors,… Q: The primary purpose for obtaining an understanding of a nonpublic audit client’s internalcontrol is… A: Generally accepted auditing standards (GAAS): These are defined as the set of general principles and… Q: The auditor shall communicate with those charged with governance an overall approach and scope of… A: Auditing of the financial statements of the company is performed to ensure the transparency and the… Q: Auditors of both public companies and private entities _______. A. have a responsibility to… A: Solution: Auditors of both public companies and private entities "have a responsibility to report… Q: The auditor shall communicate with those charged with governance an overall approach and scope of… A: The auditor shall communicate with those charged with governance an overall approach and scope of… Q: If the company is subject to PCAOB obligations for communicating control shortcomings (AS 1305),… A: SOLUTION- COMMUNICATION ABOUT CONTROL SHORTCOMING- STANDARD O AUDITING OF 1305 DESCRIBES THE… Q: If an audit of any of these companies is performed according to the AICPA auditing standards, and… A: Auditing means the independent checking of company operation by outsider. Auditor is qualified and… Q: The auditor shall communicate with those charged with governance an overall approach and scope of… A: Auditor is the person who is responsible for performing audit work for the business. Audit means… Q: Assessment of audit risk is carried out by the auditor at this stage of the audit process: a. Audit… A: Audit risk: It can be defined as the risk that the entity’s financial statements are significantly… Q: To test the operating effectiveness of a control, an audit team might use a combination of each of… A: Control: Control refers to the process of analyzing the activities that have taken place and… Q: Entity level controls are designed and placed in the operation once auditors determine that Select… A: Entity levels controls are those internal controls which help in ensuring that the management… Q: If a nonissuer wants an accountant to perform an examination of its internal controls, the… A: Click to see the answer Q: To test the operating effectiveness of a control, an audit team might use a combination ofeach of… A: Internal control: It can be defined as a system that includes the policies, rules, and procedures… Q: The company being audited has an internal auditor who is both competent and objective.The… A: Answer: Option b. Q: s for a public company, the PCAOB requires auditors to audit internal controls over:… A: The following are the three objectives of the internal control system: 1. Financial reporting… Q: Which of the following is NOT a task performed in the audit planning phase? a. reviewing an… A: In audit planning phase, some tasks are performed: Reviewing an organization’s policies and… Q: hich of the following statements is incorrect? Select one : a. Internal auditors provide assurance… A: The auditor needs to know the financial information of the company in which he is being engaged as… Q: Comparing the Internal Auditors and External Auditors , which of the following is not true about… A: Option C The Auditor is appointed by the management is incorrect statement since they are appointed… Q: During planning phase of a client’s financial audit, the CPA firm of Arthur Smith, LLP discovered a… A: The limited number of employees in the enterprise makes the segregation of duties difficult and… Q: hich of the following is usually not part of an internal audit department’s audit charter?a. A… A: Answer: Option c Q: d. When documenting their understanding of a client's internal controls, auditors are required to… A: The books of accounts are required to be audited by the auditor so as to check whether the… Q: If the company is subject to PCAOB rules involving disclosure of control shortcomings (AS 1305),… A: This question explains about internal control over financial reporting Q: If the company is subject to PCAOB obligations involving notification of control shortcomings (AS… A: Thi the company is subject to PCAOB obligations involving notification of control shortcomings (AS… Q: Which of the following combinations of standards and types of audits are most closelyrelated to the… A: Auditing Standards: The standards issued by PCAOB for audit guidance that are subject to the… Q: Which of the following combinations of standards and types of audits are most closelyrelated to the… A: Click to see the answer Q: Under what circumstances are external auditors likely to beinvolved in operational auditing? Give… A: Operational Audit: An operational audit refers to the review of any aspect of the operating… Q: Which of the following is not considered to be part of the audit evidence? Auditor information… A: This question explains about auditor information gleaned from stock exchanges Accounting records… Q: Which of the following statements best describes auditors’ responsibility for detecting a client’s… A: Click to see the answer Q: In making client acceptance and continuance decisions, the auditor will perform various procedures… A: ISA 210 Agreeing the terms of Audit Engagement: This Standard deals with the preconditions for… Q: The form and content of audit engagement letters may vary for each client, but they would generally… A: Answer - The form and content of audit engagement letters may vary for each client, but they… Q: North, CPA, is planning an independent audit of the financial statements of General Company. In… A: (a) Whether the auditor’s work is relevant to Company N depends upon the role and objectives of an… Q: Which of the following statements is characteristic of monitoring activities within the internal… A: Internal controls system includes a set of rules, policies, and procedures an organization… Q: Using your selected objective, create an audit plan of the organization's financial statements that… A: Audit planning is one of the basic principles for governing an audit.Auditor should plan his work to…
Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below. Recommended textbooks for you Auditing: A Risk Based-Approach (MindTap Course L... ISBN:9781337619455 Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg Publisher:Cengage Learning Cornerstones of Financial Accounting ISBN:9781337690881 Author:Jay Rich, Jeff Jones Publisher:Cengage Learning Accounting Information Systems ISBN:9781337619202 Author:Hall, James A. Publisher:Cengage Learning, Auditing: A Risk Based-Approach to Conducting a Q... ISBN:9781305080577 Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg Publisher:South-Western College Pub Principles of Accounting Volume 1 ISBN:9781947172685 Author:OpenStax Publisher:OpenStax College Auditing: A Risk Based-Approach (MindTap Course L... ISBN:9781337619455 Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg Publisher:Cengage Learning Cornerstones of Financial Accounting ISBN:9781337690881 Author:Jay Rich, Jeff Jones Publisher:Cengage Learning Accounting Information Systems ISBN:9781337619202 Author:Hall, James A. Publisher:Cengage Learning, Auditing: A Risk Based-Approach to Conducting a Q... ISBN:9781305080577 Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg Publisher:South-Western College Pub Principles of Accounting Volume 1 ISBN:9781947172685 Author:OpenStax Publisher:OpenStax College Are auditors required to test internal controls?Auditors are required by paragraph . 13 of AU-C Section 315 to obtain an understanding of internal control relevant to the audit. This includes all controls assessed as relevant by the auditor and is not limited to those controls that the auditor plans to test for operating effectiveness.
How does an auditor test internal controls?Signatures, checkmarks, and stamps are all signs that internal controls have been used. In this fourth category, audit sampling for tests of controls requires the inspector to look at a random selection of documents over time. If only a few of them show signs of review, this indicates a weak internal control system.
How often should internal controls be tested?Auditing standards allow a three-year rotation for control testing, as long as the area tested is not a significant risk. But if the auditor plans to rely on a test of controls related to a significant risk, operating effectiveness must be tested annually.
Why does the auditor test internal controls?The purpose of internal controls testing is to see if the controls are properly detecting or preventing material errors or purposeful misstatement in financial reports.
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