Internal Controls
According to PSA 315, internal control is defined as a process designed and effected by those charged with governance, management, and other personnel to provide ______ about the achievement of the entity's objectives
Reasonable assurance
Trivia Question: What blood type qualifies as a universal donor?
O negative
If the auditor concludes that it is more efficient to rely on internal control systems, the auditor will plan to assess control risk at
less than high level
Trivia Question: Botany is the scientific study of what?
Plants
Oral communications of internal control weaknesses are acceptable provided that these discussions are adequately documented in the
Working Papers
The conclusion reached as a result of assessing control risk is referred to as the __________
assessed level control risk
Trivia Question: What is the most common letter in the English alphabet?
E
Trivia Question: What is the scientific name of the process where plants prepare their nutrients?
Photosynthesis
Trivia Question: What is the 2nd smallest country in the world?
Monaco
A __ test confirms the auditor's understanding of how accounting systems function by tracing transactions
walk through
What is the very first step in the auditor's consideration of the entity's internal control systems?
Obtain understanding of the internal control
Trivia Question: Which planet in the Solar System is the hottest?
Venus
Under PSA requirements, the auditor cannot assess control risk at less than high level without performing
test of controls
Trivia Question: Which nationality is also called Kiwi?
New Zealand
According to auditing standards, auditors are ___ ____ to actively search for and/or identify internal control weaknesses, though they must report those that come to their attention
NOT REQUIRED
Irrespective of how effective internal controls appear, before the auditor can rely on them to reduce substantive tests, the auditor must perform
test of controls
Trivia Question: Which bird is often associated with delivering babies?
Stork
Trivia Question: How many fingers does Spongebob have on his hand?
4
Trivia Question: Who founded and was the CEO of Microsoft?
Bill Gates
When modifying the timing of substantive tests due to a high combined risk assessment, the auditor will perform them at _____ rather than at an interim date
year-end
The foundational component of internal control that provides discipline and structure is the
Control Environment
Trivia Question: DNA stands for?
Deoxyribonucleic Acid
When computer processing is used in significant accounting applications, internal control procedures can be classified into two types: general controls and
application controls
Trivia Question: What kind of alcohol is made from grapes?
Wine
Management's usual requirement that the cost of an internal control should not exceed expected benefits is classified under the ____ ____ of internal control
inherent limitations
The primary responsibility for establishing and maintaining an accounting and internal control system rests with
management and those charged with governance
Trivia Question: What’s the most populated city in the United States?
New York City
The specific component of internal control designed to identify and analyze internal and external factors that threaten the achievement of business objectives is
Risk assessment
Trivia Question: What is the world’s biggest island?
Australia
Most internal controls tend to be directed at ___ ____ rather than non-routine transactions.
routine transactions