auditing exam 2 ch 11

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

assurance of elimination of business risk

Internal controls

consist of policies and procedures designed to provide reasonable assurance that the company achieves its objectives and goals.

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?

a statement that management is responsible for establishing and maintaining an adequate internal control structure and procedures for financial reporting

The internal control framework used by most U.S. companies is the ________ framework.

COSO

The Sarbanes-Oxley Act requires

all public companies to issue reports on internal controls effectiveness.

Which of the following activities would be least likely to strengthen a company's internal control?

maintaining insurance for fire and theft

Which of the following statements is most correct with respect to separation of duties?

Employees who authorize transactions should not have custody of related assets.

Authorizations can be either general or specific. Which of the following is not
an example of a general authorization?

a sales manager's authorization for a sales return for a particular customer

a sales price list for merchandise

the policies and procedures that help ensure that necessary actions are taken to address risks to the achievement of the entity's objectives

Which of the following is not one of the subcomponents of the control environment?

adequate separation of duties

Which of the following statements related to application controls is correct?

Application controls relate to the processing of individual transactions.