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$7-36.$ Multiple Choice Questions

Select the best answer for ench $of$ the following questions. Explain the reason for your

selection.

$a.$ A direct control $is$ designed $to$:

$(1)$ Address the same assertion $as$ another control.

$(2)$ Prevent $or$ detect misstatements due $to$ error $or$ fraud $on$ a timely basis.

$(3)$ Have $an$ indirect effect $on$ the likelihood $of$ misstatement.

$(4)$ Detect only processing misstatements within the accounting information system.

$LO7-2$

$b.An$ entity's ongoing monitoring activities often include:

$(1)$ Periodic audits $by$ internal auditors.

$(2)$ The audit $of$ the annual financial statements.

$(3)$ Approval $of$ cash disbursements.

$(4)$ Management review $of$ weekly performance reports.$c.$ A primary objective $of$ procedures performed $to$ obtain $an$ understanding $of$ internil woin

trol $isto$ provide the auditors with:

$(1)$ Knowledge necossary $tod$