Which one of the following will an audit of a company's internal control include?

a. An engagement to perform internal audit procedures.

b. Implementation of key financial controls.
c. Concluding on the accuracy of the statements of cash flows.
d. Testing of management's risk assessment procedures.
status: correct (1.0)
correct: d
your answer: d
feedback: Correct.
The payroll department should be responsible for:
a. authorization of new employees.
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b. processing payroll transactions.

c. timekeeping.

d. signing payroll checks.

status: correct (1.0)
correct: b
your answer: b
feedback: Correct.
Which of the following is an example of a type of control that may be tested?
a. Contingent liabilities are disclosed adequately.
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b. Property and equipment is classified as a long-term asset.

c. Purchase orders are signed by proper agents and management.

d. An undocumented review of the expense budgets.

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correct: c
your answer: c
feedback: Correct.
Which one of the following is considered adequate documentation in an internal control system?
a. The accounting clerk initials the bank reconciliation.
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b. The mailroom mails commissions checks.

c. Invoices are prepared without sequential numbering.
d. Fixed assets are assigned useful lives at random.

status: correct (1.0)

correct: a
your answer: a
feedback: Correct.
A material weakness in the design of the operation of controls discovered in an audit of internal controls
results in:
a. a management letter.
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b. an unfavorable opinion.
c. the firing of the auditors.
d. adjusting audit journal entries.