Identify the question that an auditor least likely to include on an internal control questionnaire concerning the initiation and execution of equipment transactions.

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Chapter 19, Problem 15.3MCQ

To determine

Identify the question that an auditor least likely to include on an internal control questionnaire concerning the initiation and execution of equipment transactions.

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Which of the following controls will most likely justify a reduced assessed level ofcontrol risk for the existence assertion related to the equipment account?(1) As purchases of equipment are recorded in the purchases journal, the systemautomatically posts the item to the equipment master file.(2) Internal auditors physically examine equipment on a periodic basis and verifythat the equipment is included in the equipment master file.(3) All additions to the equipment account must be supported by a valid receivingreport.(4) Assignment of general ledger account coding is reviewed by the accounts payablesupervisor as purchases are recorded in the purchases journal.

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