Identify each of the following as a (a) purpose of an internal control system, (b) principle of internalcontrol,or (c) limitation of internal control. Human error
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Identify each of the following as a (a) purpose of an internal
control,
or (c) limitation of internal control. Human error
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- Identify each of the following as a (a) purpose of an internal control system, (b) principle of internalcontrol,or (c) limitation of internal control. Maintain adequate recordsWhich of the following statements best describes the phrase, “evaluating the design of a control”? Group of answer choices A. Considering whether the control, individually or in combination with other controls, is capable of effectively preventing, or detecting and correcting, material misstatements. B. Expressing an opinion as to the effectiveness of a control. C. Observing the application of specific controls. D. Determining whether the control exists and that the entity is using it.Which of the following is not one of the elements of a good system of internal control? a.Control environment b.Analysis of control procedures c.Information and communication d.Risk assessment
- Compare the designs of your choice of two internal controls. Determine which is the preferred design for the implementation of internal controls and why it is more likely to detect accounting irregularities. Provide at least two reasons why the preferred design for internal controls is more effective than the other design. Provide a rational for your choice.In the consideration of internal control, the operating effectiveness of controls is tested by: Flowcharts verification, Test of controls substantive procedures, or Decision tables, or neitherThe likelihood that material misstatements may have entered the accounting system and notbeen detected and corrected by the client’s internal control is referred to asa. Inherent risk.b. Control risk.c. Detection risk.d. Risk of material misstatement.
- Which one of the following is not included in the control environment? a. Integrity & Ethical values b. Organizational Structure c. Competence of Personnel d. External AuditorAn audit procedure designed to evaluate the operating effectiveness of controls in preventing or detecting and correcting, material misstatements is known as: a. a test of controls b. a test of details c. a dual purpose test d. ratio analysisWhich of the following is not true concerning control activities? a.Control procedures is another term for control activities. b. Transaction authorization is a control activity. c. Information and communication is an important component of control activities. d. Control activities generally fall into the two categories of preventive controls and detective controls.
- If detective controls signal error flags, why shouldn’t these types of controls automatically make a correction in the identified error? Why are corrective controls necessary?EExplain what lapping means, and discuss the internal control deficiency that allows it to occur. Also discuss the procedures the auditor can perform to detect lapping.