a. Explanation The auditor may use inquiry, inspection, observation, and reperformance tests of control to assess the operating effectiveness. The following the tests of controls which can be used by an auditor for each control activities: Control Activities Tests of control 1. The auditor should inspect the documents related to the credit approval given by the credit department. 2. The auditor should inspect all the merchandise receipts to assess whether they are recorded on prenumbered receiving slips. 3. In this case, the auditor may inspect all the vendor invoices along with the purchase orders for which payment is made. 4. To assess whether the accounts receivables bookkeeper is operating effectively, the auditor must observe the work of an account’s receivables bookkeeper... b. To determine Introduction: Internal control is the process which is undertaken by the organization to ensure the effectiveness of the financial transactions that are recorded. To define: The way by which substantive tests may get modified if a deficiency in control is found. Also, state the misstatement which may arise due to deficiency of control along with extended substantive procedures.

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

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Question

Chapter 5, Problem 77RSCQ

To determine

Introduction: Internal control is the process that is undertaken by the organization to ensure the effectiveness of the financial transactions that are recorded.

The test of control to assess the operating effectiveness of control.

To determine

Introduction: Internal control is the process which is undertaken by the organization to ensure the effectiveness of the financial transactions that are recorded.

To define: The way by which substantive tests may get modified if a deficiency in control is found. Also, state the misstatement which may arise due to deficiency of control along with extended substantive procedures.

Expert Solution & Answer

Chapter 5 Solutions

Auditing: A Risk Based-Approach to Conducting a Quality Audit

Ch. 5 - Prob. 1TFQ Ch. 5 - Prob. 2TFQ Ch. 5 - Prob. 3TFQ Ch. 5 - Prob. 4TFQ Ch. 5 - Prob. 5TFQ Ch. 5 - Prob. 6TFQ Ch. 5 - Prob. 7TFQ Ch. 5 - Prob. 8TFQ Ch. 5 - Prob. 9TFQ Ch. 5 - Prob. 10TFQ

Ch. 5 - Prob. 11TFQ Ch. 5 - Prob. 12TFQ Ch. 5 - Prob. 13TFQ Ch. 5 - Prob. 14TFQ Ch. 5 - Prob. 15TFQ Ch. 5 - Prob. 16TFQ Ch. 5 - Prob. 17TFQ Ch. 5 - Prob. 18TFQ Ch. 5 - Prob. 19TFQ Ch. 5 - Prob. 20TFQ Ch. 5 - Prob. 21TFQ Ch. 5 - Prob. 22TFQ Ch. 5 - Prob. 23TFQ Ch. 5 - Prob. 24TFQ Ch. 5 - Prob. 25MCQ Ch. 5 - Prob. 26MCQ Ch. 5 - Prob. 27MCQ Ch. 5 - Prob. 28MCQ Ch. 5 - Prob. 29MCQ Ch. 5 - Prob. 30MCQ Ch. 5 - Prob. 31MCQ Ch. 5 - Which of the following accounts would not be...Ch. 5 - Prob. 33MCQ Ch. 5 - Which management assertion addresses whether the...Ch. 5 - Prob. 35MCQ Ch. 5 - Prob. 36MCQ Ch. 5 - Prob. 37MCQ Ch. 5 - Prob. 38MCQ Ch. 5 - Prob. 39MCQ Ch. 5 - Prob. 40MCQ Ch. 5 - Prob. 41MCQ Ch. 5 - Prob. 42MCQ Ch. 5 - Prob. 43MCQ Ch. 5 - Prob. 44MCQ Ch. 5 - Prob. 45MCQ Ch. 5 - Prob. 46MCQ Ch. 5 - Prob. 47MCQ Ch. 5 - Prob. 48MCQ Ch. 5 - Prob. 49RSCQ Ch. 5 - Prob. 50RSCQ Ch. 5 - Ray, the owner of a small company, asked Holmes,...Ch. 5 - Prob. 52RSCQ Ch. 5 - Prob. 53RSCQ Ch. 5 - Prob. 54RSCQ Ch. 5 - Professional guidance indicates that the auditor...Ch. 5 - Prob. 56RSCQ Ch. 5 - Assume that an organization asserts that it has...Ch. 5 - Prob. 58RSCQ Ch. 5 - Prob. 59RSCQ Ch. 5 - Prob. 60RSCQ Ch. 5 - Prob. 61RSCQ Ch. 5 - Prob. 62RSCQ Ch. 5 - Prob. 63RSCQ Ch. 5 - Prob. 64RSCQ Ch. 5 - Prob. 65RSCQ Ch. 5 - Prob. 66RSCQ Ch. 5 - Prob. 67RSCQ Ch. 5 - Prob. 68RSCQ Ch. 5 - Prob. 69RSCQ Ch. 5 - Prob. 70RSCQ Ch. 5 - Prob. 71RSCQ Ch. 5 - Prob. 72RSCQ Ch. 5 - Prob. 73RSCQ Ch. 5 - Prob. 74RSCQ Ch. 5 - Prob. 75RSCQ Ch. 5 - Prob. 76RSCQ Ch. 5 - Prob. 77RSCQ Ch. 5 - Prob. 79RSCQ Ch. 5 - Prob. 80RSCQ Ch. 5 - Prob. 81RSCQ Ch. 5 - Prob. 82RSCQ Ch. 5 - Prob. 83RSCQ Ch. 5 - Prob. 84RSCQ Ch. 5 - Prob. 85RSCQ Ch. 5 - Prob. 86RSCQ Ch. 5 - Prob. 87RSCQ Ch. 5 - Prob. 89RSCQ Ch. 5 - Prob. 90FF Ch. 5 - Prob. 91FF

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Internal control is the process that is undertaken by the organization to ensure the effectiveness of the financial transactions that are recorded. The test of control to assess the operating effectiveness of control.

Solution Summary: The author explains internal control as the process undertaken by the organization to ensure the effectiveness of financial transactions that are recorded.

Introduction: Internal control is the process that is undertaken by the organization to ensure the effectiveness of the financial transactions that are recorded. The test of control to assess the operating effectiveness of control.

Chapter 5 Solutions

Introduction: Internal control is the process that is undertaken by the organization to ensure the effectiveness of the financial transactions that are recorded.

The test of control to assess the operating effectiveness of control.