Potpourri
This is Dr. Cating's favorite movie.
The Sting
This type of sampling is used to select items for internal control testing.
attribute
This is the SEC filing which contains the annual financial statements, management's assessment of internal control, and the auditor's opinion of both the financial statements and the internal controls.
10-K
This is the number of bowties that Dr. Cating owns (+/- 4).
49
This component of the COSO Internal Control Integrated Framework is frequently referred to as the "tone at the top".
Control environment
This describes the purpose of an audit.
To provide reasonable assurance that the financial statements are free from material misstatement
In attribute sampling, this factor has an inverse effect on sample size.
Tolerable deviation rate
An auditor who issues an adverse internal control opinion must also issue this type of opinion for the financial statement audit.
Any opinion can be issued as long as sufficient, appropriate audit evidence is obtained.
This is the year in which the Sarbanes-Oxley Act (SOX) was passed.
2002
These are the assertions related to account balances.
Rights and obligations, existence, completeness, and valuation/allocation
Auditors must obtain ________ & __________ audit evidence to support their audit opinion.
sufficient; appropriate
This refers to an audit of an entity’s ICFR as well as its financial statements.
Integrated
A company can only have this number of significant deficiencies before an adverse internal control report is issued.
There is no bright line answer
This is the level of public float at which companies are subject to internal control audit requirement of SOX 404(b).
$75 million
These are the three duties that must be segregated in an effective system of internal control.
Authorization, recording, and custody
This is the name of the audit procedure that starts at source documents and ends at the financial statements. It provides evidence regarding the __________ assertion.
Tracing; completeness
These are the two types of tests of internal controls.
test of design; test of operating effectiveness
These are the two parties to which an auditor would communicate significant deficiencies in internal control.
Management and audit committee
This is the allowance for sampling risk given the below information:
Tolerable deviation rate: 4%
Expected deviation rate: 2%
Confidence level: 95%
Sample size: 100
Control deviations: 3
Computed upper deviation rate: 8.5%
5.5% (8.5% UDR - 3% SDR)
This type of opinion would be given if an auditor is unable to obtain written representations from management about internal control.
Disclaimer opinion (scope limitation)
These are the three parties to which an auditor would communicate material weakness in internal control.
Management, audit committee, and shareholders
These are three of the goals of internal controls.
reliability of financial reporting; effectiveness and efficiency of operations; compliance with laws and regulations
A reliance strategy can be used when preliminary control risk is assessed at which level?
Below the maximum
This is the level of public float at which companies are subject to the management attestation requirement of SOX 404(a).
>$0
These are the two assertions that the auditor would be concerned with related to the goodwill and impairment expense accounts for a delayed goodwill impairment.
valuation; completeness