Risk and Procedures for Control Paper 17

1

CLT Company has three sales departments. Department A processes about 50% of CLT sales, Department B about 30%, and Department C about 20%. In the past, Departments A, B, and C had error rates of about 2%, 5%, and 2.5%, respectively. A random audit of the sales records yields a recording error of sufficient magnitude to distort the company results. The probability that Department A is responsible for this error is A.






2

Which of the following components is considered the foundation of the internal controls established by an organization?






3

Under the COSO framework of internal control, application controls consist of the following three types of controls:






4

From the COSO Risk Assessment component standpoint, the implementation of a new information technology system would be considered a(n):






5

To be effective, the information and communication component of COSO must accomplish all of the following goals for transactions, except:






6

According to the COSO framework, evaluators that monitor controls within an organization should have which of the following set of characteristics?






7

According to COSO, key controls are those that often have which of the following characteristics?
I. Their failure could materially affect the area’s objectives and other controls would not be expected to detect the failure on a timely basis.
II. Their operation might prevent or detect other control failures before they have an opportunity to become material to the organization’s objectives.






8

According to COSO, the use of ongoing and separate evaluations to establish a new baseline after changes have been made can best be accomplished in which of the following stages of the monitoring-for-change continuum?






9

Which of the following is not a type of control under the control activity component of the COSO framework for internal control?






10

Which of the following is not a control environment factor?






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