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NEW QUESTION: 1
Answer:
Explanation:
NEW QUESTION: 2
Which of the following is not true with respect to the control activities of an entity?
A. An understanding of control activities does not require an understanding of control activities related to
each account balance included in the financial statements.
B. Control activities are the policies and procedures that help ensure that the financial statements are
fairly presented in conformity with generally accepted accounting principles.
C. Control activities are the policies and procedures that help ensure that management directives are
carried out.
D. An understanding of control activities may be obtained while the auditor is obtaining an understanding
of the other components of internal control.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Choice "B" is correct. Control activities are the policies and procedures that help ensure that management
directives are carried out. These policies and procedures may relate to any of the three objectives
(financial reporting, operations, and compliance), not strictly to the financial reporting objective.
Choice "A" is incorrect. Control activities are defined as the policies and procedures that help ensure that
management directives are carried out.
Choice "C" is incorrect. As an auditor obtains an understanding about the other components of internal
control, he or she is also likely to obtain some knowledge about control activities.
Choice "D" is incorrect. Ordinarily, audit planning does not require an understanding of control activities
related to each account balance, transaction class, and disclosure component.
NEW QUESTION: 3
An internal audit has detected that a number of archived tapes are missing from secured storage. There was no recent need for restoration of data from the missing tapes. The location is monitored by access control and CCTV systems.
Review of the CCTV system indicates that it has not been recording for three months. The access control system shows numerous valid entries into the storage location during that time. The last audit was six months ago and the tapes w ere accounted for at that time. Which of the following could have aided the investigation?
A. Testing controls
B. Risk assessment
C. Signed AUP
D. Routine audits
Answer: A
Explanation:
Testing controls come in three types: Technical, Management and Operational.
In this question, the CCTV system has not been recording for three months and no one noticed. Improved testing controls (regular testing to verify the CCTV system is recording) would ensure that the CCTV is recording as expected.
The CCTV recordings could have aided the investigation into the missing tapes.
Incorrect Answers:
B. A risk assessment might have calculated the chance or risk of the CCTV system not recording or the risk of the tapes going missing. However, the risk assessment itself would not do anything to ensure that the CCTV system is checked regularly or prevent the tapes from going missing.
C. A signed AUP (Acceptable Use Policy) would do nothing to prevent the loss of the tapes or CCTV system recording failure.
D. Routine audits might have shown sooner that the tapes are missing but they would not help discover what happened to the tapes.
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