Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 18, Problem 4RQ
To determine
Explain the difference between a significant deficiency and a material weakness in internal control.
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What is a Control Deficiency?
What are (a) an internal control deficiency, (b) a significant deficiency, and (c) a material weakness?
Give an explanation about this statement: Why does control or internal control fails?
Chapter 18 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 18 - Prob. 1RQCh. 18 - Prob. 2RQCh. 18 - Prob. 3RQCh. 18 - Prob. 4RQCh. 18 - Prob. 5RQCh. 18 - Prob. 6RQCh. 18 - Prob. 7RQCh. 18 - Prob. 8RQCh. 18 - Prob. 9RQCh. 18 - Prob. 10RQ
Ch. 18 - Prob. 11RQCh. 18 - Prob. 12RQCh. 18 - Prob. 13RQCh. 18 - Prob. 14RQCh. 18 - Prob. 15RQCh. 18 - Prob. 16RQCh. 18 - Prob. 17RQCh. 18 - Prob. 18RQCh. 18 - Prob. 19RQCh. 18 - Prob. 20RQCh. 18 - Prob. 21RQCh. 18 - Prob. 22RQCh. 18 - Prob. 23RQCh. 18 - Prob. 24RQCh. 18 - Prob. 25RQCh. 18 - Prob. 26RQCh. 18 - Prob. 27RQCh. 18 - Prob. 28RQCh. 18 - Prob. 29QRACh. 18 - Prob. 30QRACh. 18 - Prob. 31QRACh. 18 - Prob. 32AOQCh. 18 - Prob. 32BOQCh. 18 - Prob. 32COQCh. 18 - Prob. 32DOQCh. 18 - Prob. 32EOQCh. 18 - Prob. 32FOQCh. 18 - Prob. 32GOQCh. 18 - Prob. 32HOQCh. 18 - Prob. 32IOQCh. 18 - Prob. 32JOQCh. 18 - Prob. 32KOQCh. 18 - Prob. 32LOQCh. 18 - Prob. 33OQCh. 18 - Prob. 34OQCh. 18 - Prob. 35OQCh. 18 - Match the following definitions (or partial...Ch. 18 - Prob. 37PCh. 18 - Prob. 38ITC
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- Discuss the differences between a control deficiency, a significant deficiency, a material weakness, and the two dimensions of the control deficiency - likelihood and magnitude.arrow_forward7.8 Tralor Corporation manufactures and sells several different lines of small elec- tric components. Its internal audit department completed an audit of its expen- diture processes. Part of the audit involved a review of the internal accounting controls for payables, including the controls over the authorization of transactions, accounting for transactions, and the protection of assets. The auditors noted the following items: 1. Routine purchases are initiated by inventory control notifying the purchasing de- partment of the need to buy goods. The purchasing department fills out a prenum- bered purchase order and gets it approved by the purchasing manager. The original of the five-part purchase order goes to the vendor. The other four copies are for pur- chasing, the user department, receiving for use as a receiving report, and accounts payable. 2. For efficiency and effectiveness, purchases of specialized goods and services are ne- gotiated directly between the user department and…arrow_forward1. Describe in detail the main internal control weakness in this situation. Specify what negative result(s) could occur because of the internal control weakness. 2. Describe what you would do to correct the internal control weakness.arrow_forward
- Which of the following is not one of the elements of a good system of internal control? a.Control environment b.Analysis of control procedures c.Information and communication d.Risk assessmentarrow_forwardDescribe how the nature of evidence used to evaluate the control environment differs from the nature of evidence used to evaluate control actives.arrow_forwardWhat must occur if a Significant Deficiency is identified?arrow_forward
- Describe some limitations of internal conrol systems. Why do limititations on internal control exist?arrow_forwardDescribe how the nature of evidence used to evaluate the control environment differs from the nature of evidence used to evaluate control activearrow_forwardDistinguish between inherent risk and control risk. How do internal controls affect inherent risk and control risk, if at all? What is the role of detection risk?arrow_forward
- Define the term materiality and explain why it may be difficult to apply in practicearrow_forwardDescribe how the nature of evidence used to evaluate the controlenvironment differs from the nature of evidence used to evaluate control activities.arrow_forwardOperational risks may result from breakdowns in ______ procedures, people and systems as opposed to problems incurred from _____.arrow_forward
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