A
The objective of this type of control is to prevent or detect misstatements in significant financial statement assertions
Financial Reporting Controls
The risk that prior to the application of substantive audit procedures, a material misstatement exists in a financial statement assertion defines what?
Risk of Material Misstatement
This type of control activity is designed to reduce the opportunities for someone to both cause and conceal errors or fraud
Segregation of Duties Control
Transactions are recorded at incorrect amounts. Which assertion level may be misstated
Valuation
Controls are ineffective, what should you do?
Increase substantive testing
Eric reviews approvals on timesheets for a sample of payroll records. This is an example of what?
Inspection
Transactions are recorded in the current period but pertain to economic events that occurred in a different period. This potential misstatement impacts which assertion.
Existence or Occurance
The entity does not have an obligation for recorded liabilities at a give date. What assertion level is misstated
Rights and Obligations
Katrina sends a questionnaire to the auditee. This is an example of what?
Inquiry
Babita watches the auditee perform a reconciliation. This is an example of what?
Observation
The sources of summarized data (such as ledgers, journals, and/or other records) are compared with the underlying subsidiary records before the data are accepted for inclusion in summarized records and reports is an example of what type of control activity
Summarization of Accounting Data
Management reviews performance reports is an example of what type of control activity
Independent Checks
The objective of this type of control is to comply with significant provisions of applicable laws and regulations.
Compliance Controls
The entity is exposed to loss of assets and various potential misstatements as a result of inadequate segregation of duties. Which assertion level is misstated.
Presentation and Disclosure
Darcy recalculates depreciation expense. This is an example of what?
Reperformance
Directness and Selectivity are examples of ________ to consider in determining whether the control activity is achieving its objective
Factors
Valid transactions are not recorded or are improperly classified. Which assertion level may be misstated here.
Completeness
Incoming and outgoing assets are counted, inspected, and received or given up only on the basis of proper authorization (such as a purchase order, contract, or shipping order) in accordance with established procedures. This is an example of which type of Control Activity
Safeguards over Access to and use of Assets
Recorded assets and Liabilities exist but are omitted from the financial statements. This is a potential misstatement at which assertion level
Completeness
If preliminary assessment of control risk is low, and if deviations occur in excess of acceptable number according to sampling methodology, then reassess the risk to what?
Medium or high
The risk that a misstatement could occur but may not be detected and corrected or prevented by the entity's internal control mechanism is...
CONTROL RISK
A Well designed control must be tested if it achieves its control objective. True or False
TRUE
The current period financial statement components are based on accounting principles different from those used in the prior periods presented. Which assertion level is misstated
Presentation and Disclosure
This is an ineffective control and therefore the auditor should test this control to see whether it achieves its audit objective. True or False
FALSE
The objective of this type of control is to achieve the performance desired by management for planning, productivity, quality, economy, efficiency, or effectiveness of the entity's operations.
Operational Controls