Audit Exam 2 Essay Questions

Control Enviornment

“Tone at Top”

Risk Assessment

Procedures for identifying and analyzing risks that may prevent objectives

Control Activities

Policies & Procedures that help ensure actions are taken to address risks

Information and Communication

Initiate, record, process, and report entity’s transactions, and maintain accountability for related assets

Monitoring

Assessment of quality of internal control by management to determine if they are operating as expected

Internal Control Objectives

Reliability of Reporting

Efficiency and Effectiveness of Programs

Compliance with laws and regulations

Limits of internal Controls

Competency of Operators

Collusion

Management Override

Separation of Duties

Custody

Authorization

Record-Keeping

Adequate Documents and Records

Prenumbered

Prepared Timely

Built in checks for electronic documents

Help Learn Internal Controls

Narratives

Flowcharts

Questionnaires

Types of Opinions

Unqualified

Adverse

Qualified/Disclaimer

Fraud Triangle

Incentive

Opportunity

Rationalization

Detail Tie In

Aged A/R trial balance agrees with the Master File and General Ledger

Existence

Recorded A/R exist

Completeness

Existing A/R are included

Accuracy

A/R are accurate

Classification

A/R are properly classified

Cutoff

Cutoff for A/R is correct

Realizable Value

A/R is stated at Realizable Value

Rights

Client has Rights to A/R

Presentation

A/R Presentation and Disclosure