It sounds like you had a comprehensive final exam with both theory-based questions and practical applications. I'll go through each question and provide a brief breakdown to help you review.

Short Answer Questions:

Reasons for the involvement of an IT specialist in an internal control team:

Reasons: An IT specialist helps ensure that automated systems, cybersecurity, and data integrity are properly controlled. They can also identify vulnerabilities in digital processes that might otherwise go unnoticed by non-technical team members.

How they help the project team: The IT specialist ensures the accuracy and security of financial reporting systems, sets up access controls, and monitors for fraud or unauthorized access, thereby improving the overall control environment.

Conditions for modifying an audit report:

Conditions: The auditor may modify their opinion on the report based on:

Scope limitations (e.g., insufficient evidence).

Material misstatements (e.g., financial statements not fairly presented).

Going concern issues (i.e., doubts about the company's ability to continue operations).

Modification types: Unqualified, qualified, adverse, or disclaimer of opinion.

How deficiencies in internal control arise:

Deficiencies can arise from:

Poor design of controls (e.g., lack of segregation of duties).

Inadequate implementation of policies (e.g., failure to enforce policies).

Changes in the environment (e.g., new technology without proper testing).

Human error or intentional fraud.

When interviewing will generally be used, and the process:

Used for: Interviewing is typically used in gathering qualitative data, understanding employee practices, and gaining insights into the effectiveness of internal controls or operations.

Process:

Preparation (develop questions and establish objectives).

Conducting the interview (questioning and active listening).

Documentation (note-taking or recording responses).

Analysis (interpretation of responses for conclusions).

Common problems with surveys that reduce their reliability:

Problems:

Sampling bias: Not selecting a representative sample.

Non-response bias: Respondents not representing the entire population.

Leading questions: Questions that suggest a particular answer.

Social desirability bias: Respondents answering in a way they think is socially acceptable.

Parameters that affect the determination of sample size:

Parameters:

Population size: Larger populations may require larger samples.

Margin of error: A lower margin of error demands a larger sample.

Confidence level: Higher confidence requires a larger sample.

Variability in the population: Greater variability calls for a larger sample.

Application Questions:

Identifying the type of test and assertion:

Type of test: The appropriate test could be a substantive test or a control test, depending on what is being assessed.

Assertion: Assertions like existence, completeness, accuracy, or rights and obligations could be relevant. For instance, if verifying the inventory, the assertion would be existence or completeness.

Key assertion, mitigate the risk, and testing:

Key assertion: Could be completeness, accuracy, or occurrence, depending on the audit area.

Mitigating the risk: Implementing stronger controls, segregating duties, or introducing periodic reconciliations.

Testing: Testing the effectiveness of the controls, performing substantive tests, or using audit software to review data for anomalies.

Similar to previous assignment (3 employees):

This sounds like it's related to a previous assignment, likely involving employee-related risks, testing controls over payroll, or verifying employee transactions for fraud or errors.

Identifying strengths and weaknesses:

Strengths: Could involve clear documentation, strong segregation of duties, or a solid IT system.

Weaknesses: Could involve inadequate access controls or poor communication of policies.

Mitigating weaknesses: Implement stronger policies, improve staff training, or conduct regular reviews to improve the weaknesses identified.

Feel free to let me know if you need help diving deeper into any of these questions or specific examples!