1/ What do you think about using MUS to test selling, general and administrative expenses in a typical company? (4 marks).

2/ You have a client where you are not required to test their controls. However you may choose to do so, why? (4 marks).

3/ John will start working as an internal auditor next Summer. He is explaining what he thinks he will be doing to his friend who is an engineer. “Internal auditors have a very important role in the company and report to the shareholders. One of the main responsibilities for internal auditors is finding areas for improvement in the company. As an internal auditor, I will be testing controls over financial reporting as well as effectiveness and efficiency of operations. I will also be involved in booking year-end adjusting entries.” What is John right about and what is he wrong about? (4 marks).

4/ You are using sampling to test the following control: all credit sales over $1,000 require a credit check. What is the population for your test?

Answer rating: 100% (QA)

1Using this accounting data for your experiment would give you real life exposure to the strengths and weaknesses of using it as a general testing account which can give you insights that may not have ... View the full answer