Evaluating internal controls

The primary objective of evaluating internal control in an Audit is to:

• Detect Fraud and errors.
• Ensure compliance with laws and regulations.
• Assess the effectiveness of internal control over financial reporting.
• Provide recommendation for improving operational efficiency.

When evaluating internal control, an Auditor should consider risk of material statement due to.

• Fraud only.
• Error only.
• Fraud and errors.
• Non compliance with laws and regulations.

In evaluating internal control, an auditor should assess the design and implementation of control activities to determine whether they:

• Guarantee the prevention all error and Fraud
• Ensure the achievement of all organization objectives.
• Mitigate the risk of material misstatement to a reasonable level.
• Eliminate the need for management oversight.

Does a segregation of duties issue exists when an individual with IT related duties also has a role in the entity’s business processes or the entity’s financial reporting process ?

• True
• False

Which of the following is an example of an IT general control?

• Network firewall configuration.
• Segregation of duties (SOD) policy
• Data encryption for sensitive information.
• Intrusion detection system (IDS)

The probability of a Large misstatement will be less than the probability of a small misstatement.

• True
• False

The maximum amount by which an account balance or total of transactions can be overstated is the recorded amount

• True
• False

Walkthorugh Includes:

• Inquiry
• Inspection
• Reperformance
• All of the Above

Lack of documentation entity’s processes and controls may:

• Indicate a control deficiency
• Limit the risk assessment procedures to inquiry and observation or Reperformance
• A and B
• None of the above