Which of the following items is not one of the five components of an internal control system, according to the COSO framework? Multiple Choice Control environment Risk assessment Information and communication Control activities Completeness and accuracy
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The five components are: - Control environment - Risk assessment - Control activities - Information and communication - Monitoring activities Show more…
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Sanchit J.
You are a new hire in the Accounting department of Gellin's Gelatins, a global manufacturer of snack foods. For your first assignment, you must review the risk and controls for fixed asset acquisitions to ensure that the correct alignment of risk and controls exists, and if it doesn't, you need to create an updated version of the alignment and submit it for approval. Match each control with the risk it is intended to mitigate. Control Risk Non-collusion affidavits Fraudulent bidding Periodically review physical assets Have management review accounting transactions Perform fixed asset reconciliations Initially approve fixed asset purchase Enter assets into the main fixed asset table Tag fixed assets Have employee review and sign a code of conduct Have management review acquisition agreements Ensure policies limiting fixed assets expenditures Are clearly documented and authorized Acquisitions not being conducted in adherence with policy Fixed asset being expensed instead of being capitalized Fraudulent bidding Fraudulent bidding or approval of non-budgeted items Improper use of the asset Inability to properly track the asset
Akash M.
21. Which of the following is not a consideration when the auditor is attempting to assess the inherent risk? A. Nature of the client's business. B. Existence of related parties. C. Frequency and intensity of top management review. D. Susceptibility to defalcation. 22. Inherent risk is reduced when the likelihood of defalcations is low. This would be true for an account such as: A. Property, plant and equipment. B. Held for trading securities. C. Cash. D. Accounts receivable. 23. Which of the following is an incorrect statement? A. Detection risk is a function of the effectiveness of an auditing procedure and its application. B. Detection risk arises partly from uncertainties that exist when the auditor does not examine 100 percent of the population. C. Detection risk arises partly because of other uncertainties that exist even if the auditor were to examine 100 percent of the population. D. Detection risk exists independently of the audit of the financial statements. 24. Which of the following pertains to detection risk? A. An entity's asset custodian and record-keeping function for cash are handled by one process owner. B. An entity operates in a highly complex business environment. C. An auditor uses substantive analytical procedures instead of tests of balances. D. None of the above. 25. Which of the following statements is correct concerning an auditor's assessment of control risk? A. Assessing control risk may be performed concurrently during an audit with obtaining an understanding of the entity's internal control. B. Evidence about the operation of internal control in prior audits may not be considered during the current year's assessment of control risk. C. The basis for an auditor's conclusions about the assessed level of control risk need not be documented unless control risk is assessed at the maximum level. D. The lower the assessed level of control risk, the less assurance the evidence must provide that the control procedures are operating effectively.
Madhur L.
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