Auditing Ch3-Internal Control Quiz

Which of the following is considered to be a transaction control?

• Controls to monitor other controls.

• Policies that address significant business control practices.

• Centralized processing controls.

• Physical controls to safeguard assets.

Which of the following does not fit into one of these categories of internal controls' objectives?

• Reliability of financial reporting.

• Compliance with laws and regulations.

• Continuing existence.

• Effectiveness and efficiency of operations.

Which of the following is not true of the concepts that are embodied in the COSO framework of internal controls?

• Internal controls relate to the organization's objectives.

• The six components of internal control are logically and operationally intertwined.

• Internal controls apply across all activities of the organization.

• All of the above are true.

Which of the following is not part of the control environment of an organization?

• Management's philosophy and operating style.

• Organizational structure.

• Organization's commitment to ethical values.

• All of the above are part of the control environment.

With whom does the tone of internal control typically originate?

• Auditors.

• Employees.

• Management.

• Stockholders.

Which of the following is the foundation for all other components of internal control?

• Control risk assessment.

• Control environment.

• Information and communication.

• Monitoring.

Which of the following is an example of a control environment deficiency?

• A low level of control consciousness within the organization.

• An audit committee that does not have independent members.

• An audit committee that is not viewed as the client of the external auditor.

• All of the above.

Which of the following is not part of the control environment?

• Management philosophy and operating style.

• Methods of assigning authority and responsibility.

• Personnel policies and practices.

• Control activities.

The COSO principle that an organization should identify and assess changes that significantly impact the system of internal control is related to which COSO component?

• Control environment

• Risk assessment

• Control activities

• Monitoring

Which of the following best describes the purpose of personnel policies and procedures?

• Ensure the organization hires the right people.

• Ensure the organization complies with federal and state laws in its hiring and retention decisions.

• Ensure the organization has employees that are properly trained and supervised.

• Ensure the organization performs all of the above.