13. Which of the following actvities would be least lkely to strengthen a compan

Question

13. Which of the following actvities would be least lkely to strengthen a company's internal control? a. Separating accounting from other financial operations b. Maintaining insurance for fire and theft c. Fixing responsibility for the performance of employee duties d. Carefuly selecting and training employees 14. If a potential loss on a contingent liability is remote, the liability usually is: a. disclosed in footnotes, but not accrued. b. neither accrued nor disclosed in footnotes. c. accrued and indicated in the body of the financial statements d. disclosed in the auditor's report but not disclosed on the financial statements 15. An auditor should design the written audit program so that: a. Substantive tests prior to the balance sheet date will be minimized. b. Each account balance will be tested under either test of controls or tests of transactions. c. All material transactions will be selected for substantive testing. d. The audit procedures selected will achieve specific audit objectives 16. A financial statement audit is designed to: Provide assurance on internal control and to identify internal control deficiencies. Obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud Detect error or fraud in the financial statements, regardless of whether or not the error or fraud is material. Obtain absolute assurance on the financial statements and express an opinion on the financial statements. a. b. c. d. 17. Which of the following procedures would an auditor least likely perform during the planning phase of a financial statement audit? a. Selecting a sample of vendors' invoices for comparison with receiving reports. b. Coordinating the assistance of entity personnel in data preparation. c. Discussing matters that may affect the audit with firm personnel responsible for non- audit services to the entity. d. Reading the current year's interim financial statements. 18. For audits of financial statemen ts made in accordance with generally accepted auditing standards, the use of analytical procedures is required: No Yes Yes No Yes Yes No No Yes No Yes No b. d. 19. An auditor's decision either to apply analytical procedures as substantive tests or to perform tests of transactions and account balances usually is determined by the: a. Availability of data aggregated at a high level. b. Relative effectiveness internal controls after testing of controls is performed

Explanation / Answer

13 b Taking insurance does not strenghten internal control 14 b It is not discolsed anywhere 15 c All material transactions need to be covered. 16 b Obtain reasonable assurance that financial statements are free from material misstatements. Please raise one or more questions as per Chegg policy for remaining MCQ.

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