Auditingtestbankchapter10(荐)..doc

Auditing and Assurance Services, 15e (Arens) Chapter 10 Internal Control, Control Risk, and Section 404 Audits Learning Objective 10-1 1) Which of the following is not one of the three primary objectives of effective internal control? A) Reliability of financial reporting B) Efficiency and effectiveness of operations C) Compliance with laws and regulations D) Assurance of elimination of business risk Answer: D Terms: Internal control objectives Diff: Easy Objective: LO 10-1 AACSB: Analytic skills 2) Which of managements assertions with respect to implementing internal controls is the auditor primarily concerned? A) Efficiency of operations B) Reliability of financial reporting C) Effectiveness of operations D) Compliance with applicable laws and regulations Answer: B Terms: Managements assertions Diff: Easy Objective: LO 10-1 AACSB: Reflective thinking skills 3) Internal controls: A) are implemented by and are the responsibility of the auditors. B) consist of policies and procedures designed to provide reasonable assurance that the company achieves its objectives and goals. C) guarantee that the company complies with all laws and regulations. D) only apply to SEC companies. Answer: B Terms: Internal control Diff: Moderate Objective: LO 10-1 AACSB: Analytic skills 4) Internal controls are not designed to provide reasonable assurance that: A) all frauds will be detected. B) transactions are executed in accordance with managements authorization. C) the companys resources are used efficiently and effectively. D) company personnel comply with applicable rules and regulations. Answer: A Terms: Internal controls; reasonable assurance Diff: Moderate Objective: LO 10-1 AACSB: Analytic skills 5) Describe each of the three broad objectives management typically has for internal control. With which of these objectives is the auditor primarily concerned? Answer: The three objectives are: ? Reliability of financial reporting. Management has both a legal an