Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 11, Problem 20.1MCQ
To determine
Identify a situation that is not to be considered an inherent limitation of the potential effectiveness of an entity’s internal control structure.
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Students have asked these similar questions
Which among the following is not representing an inherent limitation of the Internal control system
a.
Misunderstanding of instructions by employees
b.
None of these Options
c.
Employee conspiracy / collusion
d.
Limitations due to human decisions/ judgements
Which of the following items is an example of an inherent limitation in an intrnal control system?
A. Segregation of employee duties
B. Human error in decision making
C. Ineffective board of directors
D. Understaffed internal audit functions.
Why is a system of internal control not able to overcome collusion by employees?
b. In what way does internal control contribute to faithful representation in its financial statements?
Chapter 11 Solutions
Auditing And Assurance Services
Ch. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQ
Ch. 11 - Prob. 11RQCh. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 16RQCh. 11 - Prob. 17RQCh. 11 - Prob. 18RQCh. 11 - Prob. 19RQCh. 11 - Prob. 20.1MCQCh. 11 - Actions, policies, and procedures that reflect the...Ch. 11 - Prob. 20.3MCQCh. 11 - Prob. 21.1MCQCh. 11 - Prob. 21.2MCQCh. 11 - Prob. 21.3MCQCh. 11 - Prob. 22.1MCQCh. 11 - Prob. 22.2MCQCh. 11 - Which of the following correctly describes an...Ch. 11 - Prob. 23DQPCh. 11 - Prob. 24DQPCh. 11 - The following are misstatements that have occurred...Ch. 11 - Prob. 26DQPCh. 11 - Prob. 27DQPCh. 11 - Prob. 28DQPCh. 11 - Prob. 29DQPCh. 11 - Prob. 30DQPCh. 11 - Prob. 31DQPCh. 11 - Prob. 32C
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Similar questions
- Which one of the following is not included in the control environment? a. Integrity & Ethical values b. Organizational Structure c. Competence of Personnel d. External Auditorarrow_forwardInternal control policies and procedures have limitations not including: O Collusion. O Human fraud. O Cost-benefit principle. O Establishing responsibilities. Human error.arrow_forwardWhich of the following is true of internal control? A. Internal control procedures tend to diminish the importance of operational efficiency. B. A company's outside auditor is responsible for the company's internal control system. C. Internal controls are only necessary for public companies. D. One of the major purposes of internal control is to ensure that the assets are safeguarded.arrow_forward
- Which of the following is NOT included in the concept of internal control? O entity's resources O entity's processes O entity's culture O entity's external auditorsarrow_forwardWhich one of the following is not an objective of a system of internal controls? Select one: 1. Overstate liabilities in order to be conservative 2. Enhance the accuracy and reliability of accounting records 3. Safeguard company assets 4. Reduce the risks of errorsarrow_forwardWhich of the following does NOT describe inherent risk? O tends to be driven by the nature of the business or account O risk a misstatement occurs irrespective of any controls determined by the effectiveness of internal controls O auditor cannot influence inherent riskarrow_forward
- When obtaining an understanding of an entity’s internal control, an auditor should concentrate on the substance ofcontrols rather than their form because:Select one: a. Management may establish appropriate controls but not enforce compliance with them. b. The controls may be operating effectively but may not be documented. c. The controls may be so inappropriate that no reliance is contemplated by the auditor. d. Management may implement controls whose costs exceed their benefits.arrow_forwardWhich of the following is NOT an example of a significant deficiency in internal control? O evidence of an effective response to identified significant risks O misstatements not prevented or detected by internal controls O evidence of an ineffective entity risk assessment process O identification of management fraudarrow_forwardWhich of the following would assist an entity in cat and prevent fraud? a. Accounting reconciliations b. Segregation of duties c. All the options d. Performance reviewsarrow_forward
- Which of the following is not an element of internal control? A) Only promoting from within. B) Implement segregation of duties. C) Maintain adequate accounting records. D) Conduct internal audits.arrow_forwardWhich of the following is an inherent limitation of any client's internal control? Multiple Choice • Procedures designed to assure the execution and recording of transactions in accordance with proper authorizations are effective against frauds perpetrated by management. • Procedures whose effectiveness depends on separation of duties can be circumvented by collusion. • The competence and integrity of client personnel provide an environment conducive to control and provides assurance that effective control will be achieved. • The benefits expected to be derived from effective internal controls usually do not exceed the costs of effective internal controls.arrow_forwardOne of the principles of internal control is "establishment of responsibility". This principle does not include: a. one person being responsible for one task. b. independent internal verification. c. authorisation of transactions. d. approval of transactions.arrow_forward
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