Answered: Identify important internal control…

Identify important internal control activitiespresent in a properly designed system tomitigate the risk of material misstatementsfor each relevant assertion in the financeand investment cycle.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter7: Planning The Audit: Identifying, Assessing, And Responding To The Risk Of Material Misstatement

Section: Chapter Questions

Problem 9RQSC: How does inherent risk relate to internal controls? Why is it important to assess inherent risks of...

See similar textbooks

Related questions

Q: Zimt AG wrote down the value of its inventory in 2007 and reversed the write-downin 2008. Compared t...

A: The correct option is Option C. Inventory turnover was too high.

Q: The “Wise Dimension” owned by Mr. Cousins. Wise Dimension imports office supplies from all over the ...

A: A journal entry is made to record the financial transaction in the books of accounts. Adjusting entr...

Q: The unadjusted trial balance as of December 31, 2021, for the Bagley Consulting Company appears belo...

A: Please note: Since you have posted a question with multiple sub-parts, we will solve the first three...

Q: Help asap

A: Under Last in First out method, it is assumed that the most recently purchased goods are sold first ...

Q: how to correct a credit invoice (issued by the business) has not been recorded at all?

A: When customers return goods due to various reasons like damaged goods within the warranty period, pu...

Q: Usefulness of income statement and cash flow statement for the invsetors

A: Definition: Income statement: Income statement is a financial statement that shows the net income or...

Q: Cape Cod Shirt Shop manufactures T-shirts and decorates them with custom designs for retail sale on ...

A: Fixed Cost: It is a cost which is constant in the short run, it is not related to any change in the ...

Q: When a company pays its rent in advance, its balance sheet will refl ect a reduction in: B . assets ...

A: Current assets: The assets which could be converted into cash within one year like accounts receivab...

Q: Sprague Company uses the aging method to adjust the allowance for uncollectibleaccounts at the end o...

A: The aging method alludes to the technique for assessing the measure of an organization's records rec...

Q: After you have completed a bank reconciliation, there can be numerous un‐ reconciled bank statement ...

A: Bank reconciliation statement is a statement prepared to reconcile the difference between the 'Bank ...

Q: Question 3. Choose the best piping systems as shown in the table below using Annual Worth method (MA...

A: AW Analysis: The annual value of all expected receipts (incomes) and disbursements (cost) during the...

Q: Per your request I am resubmitting question S-13 and adding S-12 per your request. Thanks

A: Earnings per share: It is a profitability ratio which shows the profit earned on each share of the c...

Q: What is the difference between document examination and reperformance when conducting testsof contro...

A: Test of controls are performed to obtain evidence about whether controls that are candidates to be r...

Q: The cost of equity is ________. Group of answer choices A. the interest associated with debt B. t...

A: Cost of equity: Cost of equity is the percentage amount of dividend and growth to the paid to the sh...

Q: items appear on the balance sheet of a company with a one-year operating cycle. Identifythe proper c...

A: Current liability: Current liability is a debt that the companies need to pay the debts from existi...

Q: Archer Co. completed the following transactions and uses a perpetual inventory system. Aug. 4 Sold $...

Q: Scenario 1 A large city has been financing all of its services through property taxes and sales taxe...

A: 1) General fund; The resources collected and maintained for daily operations of the government is ca...

Q: How is the accounting for a purchase of a company’s own stock (treasury stock) different from the pu...

A: A company’s stock is the shares a company holds or the shares on which a company has its ownership t...

Q: When prices are rising, would you choose a FIFO or weighted average cost flow assumption? Explain, u...

A: Cost Flow Assumptions: It is an assumption that determines the way or order in which the costs shoul...

Q: On January 1, Renewable Energy issues bonds that have a $20,000 par value, mature in eight years, an...

A: Bonds issued at premium: When bonds are issued at the price which is more than the par value then it...

Q: In her book The Seven Signs of Ethical Collapse, Jennings explains: “When an organization collapses ...

A: Given information is: In her book The Seven Signs of Ethical Collapse, Jennings explains: “When an o...

Q: Which of the following is not an advantage of budgeting? a) Forces managers to planb) Provides infor...

A: Budget: A budget is an estimation of revenue and expenses over a specified period of time and is usu...

Q: Principles of Financial Accounting- 3.3 From the following list, identify which items are considered...

A: Original source of documents is the document which supports or substantiates the transactions record...

Q: The following information is available to reconcile Branch Company’s book balance of cash with its b...

A: Given: Debited balance in cash account = $ 27,497 Cash balance in July = $ 27,233 Amount in Cheque n...

Q: The systems development life cycle is a methodology. Why are auditors responsible for evaluating the...

A: Auditor: The person who is considered responsible for assessing the credibility of the financial st...

Q: When completing the audit of internal controls for a public company, AS 2201 requiresauditors to tes...

Q: Selected financial data for Bahama Bay and Caribbean Key are as follows:Required:1. Calculate the de...

A: Bahama Bay: Caribbean Key: Bahama Bay ratio is higher than Caribbean Key ratio.

Q: Typically accounting tasks include all off the following tasks except

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,...

Q: On April 1, 2021, Primer Corp. signs a five-year lease to use office space. The present value of the...

A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of...

Q: Equivalent Units of Conversion Costs The Rolling Department of Kraus Steel Company had 4,140 tons in...

A: Equivalent units is arrived by multiplying units on hands with percentage of completion.

Q: Chaney acquires 100% of the voting shares of Roberts on January 1, 2010 in a transaction structured ...

A: Contingent Consideration refers to the additional amount payable by the acquirer in addition to the ...

Q: Define retained earnings

A: Financial Accounting: It refers to the process of recording the financial transactions of the busi...

Q: After all the ledgers had been drawn up, the following differences and errors were identified. Indic...

A: The following ledgers have been rectified as per the given information.

Q: What is meant by (a) vouching, (b) tracing, and (c) scanning? What is the difference betweenvouching...

A: Vouching: Vouching is a method by which an auditor traces the transactions to its origin. The refer...

Q: What is the answer to number three I have already tried sales discount and and sales returns and all...

A: Net method: Under the net method, the sales are initially recorded with the net amount i.e., after d...

Q: Accounting Question

A: a. Service revenue earned = Total amount received / Total months = $3,200 / 10 months = $320

Q: Measure Maps Silver Lining Inc. has a balanced scorecard with a strategy map that shows that deliver...

A: We have the following information: The company’s target hours from ordered to delivered is 40 Every...

Q: A new machine with a purchase price of $99,636, with transportation costs of $7,636, installation co...

A: Cost of Assets: All costs which are incurred from purchase to put to use on machinery are called the...

Q: Q.2.1 Open, post to and balance the debtors control account in the general ledger of Dumbledore Magi...

A: -> In debtor control accounting, all sales made to the customers shall be treated as a debit and ...

Q: If you are the CEO and you give your employees a bonus at the end the year, according to their net i...

A: The CEO of the company should always aim for lower expenses hence the CEO should aim for lower bonus...

Q: The auditors assessed risk of material misstatement at 0.50 and said they wanted to achieve a0.05 ri...

A: Detection risk: It can be defined as the risk that the auditor may fail in detecting the significant...

Q: When managerial accountants design an evaluation system that is based on criteria for which a manage...

A: Performance measurement can be explained as an indicator in management accounting that evaluates the...

Q: Suppose an auditor has been paid $1,000,000 each year for the past several years by a company to per...

A: Given: Amount of audit for each year = $ 1,000,000 Amount of audit for the current year = $ 1,200,00...

Q: Boots, Inc. is a “C” corporation engaged in the show manufacturing business. Boots is a Calendar yea...

A: Since there are multi sub parts in one question, calculation will be given for first three sub parts...

Q: What is outstanding bond?

A: Bond: It can be defined as the loan given to a business or any other organization by the investor an...

Question

Identify important internal control activities
present in a properly designed system to
mitigate the risk of material misstatements
for each relevant assertion in the finance
and investment cycle.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which one of the following components of internal control over financial reporting sets the tone for the organization? a. Risk assessment. b. Control environment. c. Information and communication. d. Monitoring.
How does inherent risk relate to internal controls? Why is it important to assess inherent risks of material misstatement prior to evaluating the quality of an organization’s internal controls?
Which of the following approaches is most suitable for auditing the finance and investment cycle?a. Perform extensive tests of controls and limit substantive procedures to analytical procedures.b. Ignore internal controls and perform extensive substantive procedures.c. Gain an understanding of internal controls and perform extensive substantive procedures.d. Ignore internal controls and limit substantive procedures to analytical procedures.
Give examples of tests of controls to test the operating effectiveness of internal controls in the finance and investment cycle.
What are analytical procedures? Substantive tests designed to assess control risk Substantive tests designed to evaluate the validity of management’s representation letter Substantive tests designed to study relationships between financial and non-financial data All of the above
Identify important internal control activitiespresent in a properly designed system tomitigate the risk of material misstatementsfor each relevant assertion in the revenueand collection cycle.
Risk assessment procedures are performed by auditors to: a. detect material misstatements in the financial statements. b. distribute the information needed to perform control activities. c. express an opinion on the financial statements. d. identify and assess the risks in achieving the entity’s objectives.
In the context of your organization, evaluate its main sources of potential financial risk using suitable techniques. For each risk area you are required to recommend and justify appropriate action to reduce the exposure.
Give examples of tests of controls to test theoperating effectiveness of internal controlsin the revenue and collection cycle
Below are events, for each event, identify the type of risk the event entails, classify your identified risk as either systematic or unsystematic risk; Economic distress Mismanagement Technological causes Working capital problems Fraudulent management.
This is a process of evaluating the effectiveness of a client's internal controls in preventing or detecting material misstatements in the financial statements is called __________________ (answer in All CAPS)
Provide the key factor auditors will have to review when deciding on the inherent risk within the accounting system.