Question

Andrew is in charge of auditing internal controls over the investments section on the year-end Gotham City Defense Company audit. In the course of his testing, Andrew comes across an internal control that requires securities to be kept in a vault or safe deposit box or with an outside financial institution engaged to provide safe keeping. The purpose of the control is to ensure that investment documents that are negotiable or that provide evidence of legal ownership are physically secure.

Required:
a. Which assertion does the control relate to concerning the investments account?
b. What is an appropriate test of the control? How can Andrew determine whether the control exists and is effectively designed?
c. Assume that the control you described in (2) exists and is effectively designed. Can Andrew use a dual purpose test that tests the operating effectiveness of the control and also provides evidence for the financial statement audit of the investments account? If yes, what test will Andrew use? What evidence does the dual purpose test provide for the financial statement audit?



$1.99
Sales0
Views35
Comments0
  • CreatedJanuary 21, 2015
  • Files Included
Post your question
5000