Risk and Procedures for Control Paper 7

1

Which one of the following would not be considered an internal control structure policy or procedure relevant to a financial statement audit?






2

Appropriate control over obsolete materials requires that they be






3

A company has computerized sales and cash receipts journals. The computer programs for these journals have been properly debugged. The auditor discovered that the total of the accounts receivable subsidiary accounts differs materially from the accounts receivable control account. This could indicate






4

An auditor noted that the accounts receivable department is separate from other accounting activities. Credit is approved by a separate credit department. Control accounts and subsidiary ledgers are balanced monthly. Similarly, accounts are aged monthly. The accounts receivable manager writes off delinquent accounts after 1 year, or sooner if a bankruptcy or other unusual circumstances are involved. Credit memoranda are prenumbered and must correlate with receiving reports. Which of the following areas could be viewed as an internal control weakness of the above organization?






5

One control objective of the financing/treasury cycle is the proper authorization of company transactions dealing with debt and equity instruments. Which of the following controls would best meet this objective?






6

The cash receipts function should be separated from the related record keeping in an organization to






7

In an audit of a purchasing department, which of the following ordinarily would be considered a risk factor?






8

Management wishes to include in its internal controls over factory payroll a procedure to ensure that employees are paid only for work actually performed. To meet this objective, which of the following internal control actions would be most appropriate?






9

Which of the following credit approval procedures would be the basis for developing a deficiency finding for a wholesaler?






10

A means of ensuring that payroll checks are drawn for properly authorized amounts is to






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