Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 67RSCQ
To determine
Concept Introduction:The objective of this analysis is to analyse the risks to financial reporting that is associated with the inadequacy of segregation of duties and that may lead the organization towards increased risks as they may have to undergo fraudulent activities.
Requirement 1
The risks to financial reporting that is associated with the inadequacy of segregation of duties.
b
To determine
Concept Introduction:The objective of this analysis is to analyse the risks to financial reporting caused by the other controls that might mitigate the segregation of dutiesand that may lead the organization towards increased risks as they may have to undergo fraudulent activities.
Requirement 2
To explain:Other controls that might mitigate the segregation of duties.
To determine
Concept Introduction:The objective of this analysis is to analyse the possible tests of controls for mitigating controls that may lead the organization towards minimized risks as they have set relevant controls to avoid fraudulent activities.
Requirement 3
Possible tests of controls for mitigating controls.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
1. Cite specific examples of risk avoidance, Reduction, Transfer and Retention?
2. What is the significance of internal control in an organization? Cite an example of a company that failed due to IC deficiency?
Which one of the following would be considered a financial cost of organizational control?
The cost of failing to recognize opportunities to increase sales due to data loss.
The cost of having financial statements audited by an independent accounting firm.
The cost of an upset customer who leaves the store because it took too long for a manager to approve a price adjustment for a
customer farther up in the line.
nternal control does not consist of policies and procedures that
Select one:
a. Ensure that business information is accurate
b. Protect assets from misuse
c. Guarantee the company will earn a profit
d. Ensure employees and managers comply with laws and regulations
Chapter 5 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 5 - Prob. 1TFQCh. 5 - Prob. 2TFQCh. 5 - Prob. 3TFQCh. 5 - Prob. 4TFQCh. 5 - Prob. 5TFQCh. 5 - Prob. 6TFQCh. 5 - Prob. 7TFQCh. 5 - Prob. 8TFQCh. 5 - Prob. 9TFQCh. 5 - Prob. 10TFQ
Ch. 5 - Prob. 11TFQCh. 5 - Prob. 12TFQCh. 5 - Prob. 13TFQCh. 5 - Prob. 14TFQCh. 5 - Prob. 15TFQCh. 5 - Prob. 16TFQCh. 5 - Prob. 17TFQCh. 5 - Prob. 18TFQCh. 5 - Prob. 19TFQCh. 5 - Prob. 20TFQCh. 5 - Prob. 21TFQCh. 5 - Prob. 22TFQCh. 5 - Prob. 23TFQCh. 5 - Prob. 24TFQCh. 5 - Prob. 25MCQCh. 5 - Prob. 26MCQCh. 5 - Prob. 27MCQCh. 5 - Prob. 28MCQCh. 5 - Prob. 29MCQCh. 5 - Prob. 30MCQCh. 5 - Prob. 31MCQCh. 5 - Which of the following accounts would not be...Ch. 5 - Prob. 33MCQCh. 5 - Which management assertion addresses whether the...Ch. 5 - Prob. 35MCQCh. 5 - Prob. 36MCQCh. 5 - Prob. 37MCQCh. 5 - Prob. 38MCQCh. 5 - Prob. 39MCQCh. 5 - Prob. 40MCQCh. 5 - Prob. 41MCQCh. 5 - Prob. 42MCQCh. 5 - Prob. 43MCQCh. 5 - Prob. 44MCQCh. 5 - Prob. 45MCQCh. 5 - Prob. 46MCQCh. 5 - Prob. 47MCQCh. 5 - Prob. 48MCQCh. 5 - Prob. 49RSCQCh. 5 - Prob. 50RSCQCh. 5 - Ray, the owner of a small company, asked Holmes,...Ch. 5 - Prob. 52RSCQCh. 5 - Prob. 53RSCQCh. 5 - Prob. 54RSCQCh. 5 - Professional guidance indicates that the auditor...Ch. 5 - Prob. 56RSCQCh. 5 - Assume that an organization asserts that it has...Ch. 5 - Prob. 58RSCQCh. 5 - Prob. 59RSCQCh. 5 - Prob. 60RSCQCh. 5 - Prob. 61RSCQCh. 5 - Prob. 62RSCQCh. 5 - Prob. 63RSCQCh. 5 - Prob. 64RSCQCh. 5 - Prob. 65RSCQCh. 5 - Prob. 66RSCQCh. 5 - Prob. 67RSCQCh. 5 - Prob. 68RSCQCh. 5 - Prob. 69RSCQCh. 5 - Prob. 70RSCQCh. 5 - Prob. 71RSCQCh. 5 - Prob. 72RSCQCh. 5 - Prob. 73RSCQCh. 5 - Prob. 74RSCQCh. 5 - Prob. 75RSCQCh. 5 - Prob. 76RSCQCh. 5 - Prob. 77RSCQCh. 5 - Prob. 79RSCQCh. 5 - Prob. 80RSCQCh. 5 - Prob. 81RSCQCh. 5 - Prob. 82RSCQCh. 5 - Prob. 83RSCQCh. 5 - Prob. 84RSCQCh. 5 - Prob. 85RSCQCh. 5 - Prob. 86RSCQCh. 5 - Prob. 87RSCQCh. 5 - Prob. 89RSCQCh. 5 - Prob. 90FFCh. 5 - Prob. 91FF
Knowledge Booster
Similar questions
- Segregation of duties is an important internal control. However,this control is often a challenge for smaller businesses because they donot have sufficient staff. Normally, a segregation of duties deficiencyresults in either a significant deficiency or a material weakness in internalcontrol. For each segregation of duties deficiency identified as(1)–(6), complete the following three tasks:a. Indicate the risk to financial reporting that is associated with theinadequacy of the segregation of duties.b. Identify other controls that might mitigate the segregation ofduties risks.c. Identify possible tests of controls for the mitigating controlsselected in (b).The inadequate segregation of duty situations includes:1. The same individual handles cash receipts, the bank reconciliation,and customer complaints.2. The same person prepares billings to customers and also collectscash receipts and applies them to customer accounts.3. The person who prepares billings to customers does not handlecash…arrow_forwardWhich of the following are correct regarding why management uses internal controls? (Check all that apply.) Multiple select question. Protect assets. Uphold company policies. Ensure reliable accounting. Reduce vendor payables. Increase revenues. Promote efficient operations.arrow_forwardWhich of the following is true of internal control? OA. Internal controls are only necessary for large businesses. OB. A company's outside auditor is responsible for the company's internal control system. OC. Internal control procedures tend to diminish the importance of operational efficiency. OD. One of the major purposes of internal control is to ensure accurate, reliable accounting records.arrow_forward
- Classify each of the following as a problem or a symptom. If it is a symptom, give two examples of a possible underlying problem. If it is a problem, give two examples of a possible symptom that may be detected.a. declining profitsb. defective production processc. low-quality raw materialsd. shortfall in cash balancee. declining market sharef. shortage of employees in the accounts payabledepartmentg. shortage of raw material due to a drought in the Midwesth. inadequately trained workersi. decreasing customer satisfactionarrow_forwardWhich of the following statements regarding flaws suffered by financial measures is not correct?A)They are hard to quantify.B)They do little to motivate employees to improve accounting profits.C)They are not effective in getting managers' attention.D)They are useful in identifying operational problems.E)None of the above.arrow_forwardWhich of the following is false about accounting information systems?A. They provide reports that people analyze.B. They prevent errors and stop employees from stealing inventory.C. They are designed to gather data about the company’s transactions.D. They consist of processes that involve input of data from source documents, processing, output, andstorage.arrow_forward
- Which of the following is false about accounting information systems? A. They provide reports that people analyze. B. They prevent errors and stop employees from stealing inventory. C. They are designed to gather data about the companys transactions. D. They consist of processes that involve input of data from source documents, processing, output, and storage.arrow_forwardWhich of the following are affected by the quality of an organization’s internal controls? a. Reliability of financial data. b. Ability of management to make informed business decisions. c. Ability of the organization to remain ¡n business. d. All of the above. e. Only a and c.arrow_forwardIs there a way to prevent managers from focusing on accounting measures as performance measures?arrow_forward
- 1. What is the external information source that is commonly used? A) Previous Financial record B) Benchmark from Market research C) Timesheet of the company employees 2. Passwords and firewalls are used to ensure the security of highly confidential information that is not for external users. A) True B) False 3. The production and sale plans for business may be liming by a limiting factor or Scarce resources. That could be due to limits of: A) Materials B) Machine hours C) A and B 4. "The increase in value would be created by having available one additional unit of a limiting resource at the original cost" is: A) Demand price B) Shadow price C) None of the above 5. The following statements have been made about rolling budgeting: 1) Keep updating the budgeting by adding further an accounting period when the earlier has expired. 2) The variants of the budget are not adjusted to reflect actual levels. Which of the above statements is/are true? A) Only 1 B) 1 and 2 C) None of the abovearrow_forwardEstablishing effective controls minimizes waste, which lowers. costs and increases profits. Which objective of internal control is this statement referring to? O O о Safeguard assets Ensure accurate, reliable accounting records Promote operational efficiency Encourage employees to follow company policies I DON'T KNOW YETarrow_forward1. What are the collective procedures implemented by management to ensure that business activities are properly recorded in the accounting system? a.internal accounting system b.double-entry accounting system c.business system d.internal control system 2. A company limits access to computerized accounting records. What can be said of this procedure? a.It is a good example of physical controls. b.It violates adequate documents and records. c.It violates proper segregation of duties. d.It is a good example of independent checks on performance. 3. What element of internal control would include the setting of "tone at the top"? a.control environment b.risk assessment c.monitoring d.control activitiesarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College