1. Because of conservatism considerations, auditors should allow a client to overestimate its reserve for restructuring.
2. U.S. accounting standards require organizations to use a two-step process to determine the impairment of goodwill.
3. An audit of Level 1 assets is likely to be less challenging than an audit of Level 3 assets.
4. When there is a ready market for financial instruments the audit procedures related to valuation and disclosures are more straightforward than when the instrument is not readily marketable.
5. When auditing financial hedges, the auditor should understand the product, identify relevant risks and controls, and understand the appropriate accounting.
6. Evidence of fraud, whether or not material, on the part of senior management, would likely cause the auditor to conclude that the client had a material weakness in internal control over financial reporting.
7. A compensating control would not be considered as a factor that could mitigate a potential material weakness.
8. Internal auditors can perform both consulting activities and assurance activities.
9. All internal auditors are required to have the CIA designation in order to practice internal auditing.

  • CreatedSeptember 22, 2014
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