TRUE-FALSE QUESTIONS 1. Effective internal control allows for more informed decisions by internal and external users of
Question:
TRUE-FALSE QUESTIONS
1. Effective internal control allows for more informed decisions by internal and external users of the financial information.
2. While understanding a client’s internal control over financial reporting may help the external auditor plan the audit, the external auditor is not required to obtain this understanding for all audit engagements.
3. Internal control is intended to provide absolute assurance that an organization will achieve its objective of reliable reporting.
4. Setting financial reporting objectives is a prerequisite for an organization designing and implementing internal control over financial reporting.
5. The control environment component of internal control is considered a pervasive or entity-wide control because it affects multiple processes and multiple types of transactions.
6. The control environment is seen as the foundation for all other components of internal control.
7. Only organizations in high-risk industries face a risk that they will not achieve their objective of reliable financial reporting.
8. An organization’s risk assessment process should identify risks to reliable financial reporting from both internal and external sources.
Step by Step Answer:
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg