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1.Uponr ecei ptofcust omer ’ schecksi nt hemai l r oom,ar esponsi bl eempl oyee shoul dpr epar ear emi t t ancel i st i ngt hati sf or war dedt ot hecashi er .Acopyoft he l i st i ngshoul dbesentt ot he a.I nt er nal audi t ort oi nvest i gat et hel i st i ngf orunusual t r ansact i ons b.Tr easur ert ocompar et hel i st i ngwi t ht hemont hl ybankst at ement c.Account sr ecei v abl ebookkeepert oupdat et hesubsi di ar yaccount sr ecei vabl e r ecor ds. d.Ent i t y’ sbankt ocompar et hel i st i ngwi t ht hecashi er ’ sdeposi tsl i p. 2.Whi choft hef ol l owi ngpr ocedur esmostl i kel ywoul dnotbeacont r oldesi gnedt o r educet her i skofer r or si nt hebi l l i ngpr ocess ? a.Compar i ngcont r olt ot al sf ors hi ppi ngf orshi ppi ngdocument swi t h cor r espondi ngt ot al sf orsal esi nvoi ces b.Usi ngcomput erpr ogr ammedcont r ol sont hepr i ci ngandmat hemat i cal accur acyofsal esi nv oi ces. c.Mat chi ngshi ppi ngdocument swi t happr ov edsal esor der sbef or ei nv oi ce pr epar at i on. d.Reconci l i ngt hecont r olt ot al sf orsal esi nv oi ceswi t ht heaccount sr ecei vabl e subsi di ar yl edger . 3.I nt er nal cont r ol i sst r engt henedwhent hequant i t yofmer chandi seor der edi s omi t t edf r om t hecopyofpur chaseor dersentt ot he a.Depar t mentt hati ni t i at edt her equi si t i on b.Recei vi ngdepar t ment c.Pur chasi ngagent d.Account spayabl edepar t ment 4.Theul t i mat epur poseofassessi ngcont r ol r i ski st ocont r i but et ot heaudi t or ’ s eval uat i onoft her i skt hat a.Test sofcont r ol smayf ai lt oi dent i f ypr ocedur esr el ev antt oasser t i ons. b.Mat er i almi sst at ement smayexi sti nt hefinanci al st at ement s. c.Speci fiedcont r ol sr equi r i ngsegr egat i onofdut i esmaybeci r cumv ent edby col l usi on. d.Ent i t ypol i ci esmaybeover r i ddenbyseni ormanagement .

5.Cont r ol r i skshoul dbeassessedi nt er msof a.Speci ficcnt r olpr ocedur es b.Typesofpot ent i al f r aud. c.Fi nanci al st at ementasser t i ons. d.Cont r ol envi r onmentf act or s. 6.Whenassessi ngcont r ol r i skbel owt hemax i mum l evel ,anaudi t ori sr equi r edt o documentt heaudi t or ’ s Basi sf or Under st andi ngof

Concl udi ngThat

TheEnt i t y’ sCont r ol

Cont r olRi skI sBel ow

Envi r onment a.Yes b.No c.Yes d.No

TheMaxi mum Level No Yes Yes No

7.Whi choft hef ol l owi ngi sl eastl i k el yt obeevi dencet heaudi t orex ami nest o det er mi newhet hercont r ol sar eoper at i ngeffect i vel y ? a.Recor dsdocument i ngusageofcomput erpr ogr ams b.Cancel edsuppor t i ngdocument s c.Confir mat i onsofaccount sr ecei v abl e d.Si gnat ur esonaut hor i zat i onf or ms 8.Whi choft hef ol l owi ngst at ement si scor r ectconcer ni nganaudi t or ’ sassessment ofcont r ol r i sk ? a.Assessi ngcont r olmayr i s kmaybeper f or medconcur r ent l ydur i nganaudi t wi t hobt ai ni nganunder st andi ngoft heent i t y’ si nt er nalcont r ol . b.Evi denceaboutt heoper at i onofcont r ol si npr i oraudi t smaynotbeconsi der ed dur i ngt hecur r enty ear ’ sassessmentofcont r olr i sk c.Thebasi sf oranaudi t or ’ sconcl usi onsaboutt heassessedl ev el ofcont r olr i sk neednotbedocument edunl esscont r ol r i ski sassessedatt hemaxi mum l evel . d.Thel owert heassessedl evel ofcont r ol r i sk,t hel essassur ancet heevi dence mustpr ovi det hatt hecont r olpr ocedur esar eoper at i ngeffect i vel y .

9.Soundi nt er nalcont r ol di ct at est hati mmedi at el yuponr ecei vi ngchecksf r om cust omer sbymai l ,ar esponsi bl eempl oy eeshoul d a.Addt hecheckst ot hedai l ycashsummar y . b.Ver i f yt hateachchecki ssuppor t edbyapr enumber edsal esi nv oi ce. c.Pr epar eadupl i cat el i st i ngofchecksr ecei v ed. d.Recor dt hechecksi nt hecashr ecei pt sj our nal . 10. Regar dl essoft heassessedl evel ofcont r ol r i sk,anaudi t orwoul dper f or m some a.Test sofcont r ol st odet er mi net heeffect i v enessofi nt er nal cont r olpol i ci es. b.Anal yt i cal pr ocedur est ov er i f yt hedesi gnofi nt er nal cont r olpr ocedur es c.Subst ant i v et est st or est r i ctdet ect i onr i skf orsi gni fic antt r ansact i oncl asses. d.Dual pur poset est st oeval uat ebot ht her i skofmonet ar ymi sst at ementand pr el i mi nar ycont r ol r i sk. 11. Repor t abl econdi t i onsar emat t er st hatcomet oanaudi t or ’ sat t ent i ont hatshoul d becommuni cat edt oanent i t y’ saudi tcommi t t eebecaus et heyr epr esent a.Di scl osur esofi nf or mat i ont hatsi gni fi cant l ycont r adi ctt heaudi t or ’ sgoi ng concer nassumpt i on b.Mat er i alf r audori l l egal act sper pet r at edbyhi ghl ev el management . c.Si gni ficantdefici enci esi nt hedesi gnoroper at i onofi nt er nal cont r ol . d.Mat er i alf r audori l l egal act sper pet r at edbyhi ghl ev el management . 12. Whi choft hef ol l owi ngst at ement si scor r ectconcer ni nganaudi t or ’ sr equi r ed communi cat i onofr epor t abl econdi t i ons ? a.Ar epor t abl econdi t i onpr evi ousl ycommuni cat eddur i ngt hepr i ory ear ’ saudi t t hatr emai nsuncor r ect ed,causesascopel i mi t at i on. b.Anaudi t orshoul dper f or mt est sofcont r ol sonr epor t abl econdi t i onsbef or e communi cat i ngt hem t ot hecl i ent . c.Anaudi t or ’ sr epor tonr epor t abl econdi t i onsshoul di ncl udear est r i ct i onont he di st r i but i onoft her epor t . d.Anaudi t orshoul dcommuni cat er epor t abl econdi t i onsaf t ert est sofcont r ol s, butbef or ecommenci ngsubst ant i v et est s.

13. Anaudi t orsuspect st hatacl i ent ’ scashi eri smi sappr opr i at i ngcashr ecei pt sf or per sonal usebyl appi ngcust omerchecksr ecei vedi nt hemai l .I nat t empt i ngt o uncov ert hi sembezzl ementscheme,t heaudi t ormostl i kel ywoul dcompar et he a.Dat eschecksar edeposi t edperbankst at ement swi t ht hedat esr emi t t ance cr edi t sar er ecor ded. b.Dai l ycashsummar i eswi t ht hesumsoft hecashr ecei pt sj our nal ent r i es c.I ndi v i dualbankdeposi tsl i pswi t ht hedet ai l soft hemont hl ybankst at ement s d.Dat esuncol l ect i bl eaccount sar eaut hor i z edt obewr i t t enoffwi t ht hedat est he wr i t eoffsar eact ual l yr ecor ded. 14. Anaudi t orusest heknowl edgepr ovi dedbyt heunder st andi ngofi nt er nal cont r ol andt heassessedl ev el ofcont r olr i skpr i mar i l yt o a.Det er mi newhet herpr ocedur esandr ecor dsconcer ni ngt hesaf eguar di ngof asset sar er el i abl e b.Ascer t ai nwhet hert heoppor t uni t i est oal l owanyper sont obot hper pet r at e andconceal f r audar emi ni mi z ed c.Modi f yt hei ni t i al assessment sofi nher entr i skandpr el i mi nar yj udgment s aboutmat er i al i t yl evel s. d.Det er mi net henat ur e,t i mi ngandext entofsubst ant i vet est sf orfinanci al st at ement sasser t i ons. 15. Managementphi l osophyandoper at i ngst yl emostl i k el ywoul dhav easi gni ficant i nfluenceonanent i t y’ scont r olenvi r onmentwhen a.Thei nt er nal audi t orr epor t sdi r ect l yt omanagement . b.Managementi sdomi nat edbyonei ndi vi dual . c.Accur at emanagementj obdescr i pt i onsdel i neat especi ficdut i es. d.Theaudi tcommi t t eeact i v el yov er seest hefinanci al r epor t i ngpr ocess. 16. Whi choft hef ol l owi ngdepar t mentmostl i kel ywoul dappr ovechangesi npay r at esanddeduct i onsf r om empl oyeesal ar i es ? a.HumanResour ces/ Per sonnel b.Tr easur er . c.Cont r ol l er . d.Payr ol l .

17. Dur i ngt heconsi der at i onofi nt er nal cont r oli nafinanci al st at ementaudi t ,an audi t ori snotobl i gat edt o

a.Sear chf orsi gni ficantdefici enc i esi nt heoper at i onoft hei nt er nal cont r ol . b.Under st andt hei nt er nalcont r olandt hei nf or mat i onsy s t em c.Det er mi newhet hert hecont r ol act i vi t i esr el evantt oaudi tpl anni nghavebeen pl acedi noper at i on. d.Per f or m pr ocedur est ounder st andt hedesi gnofi nt er nal cont r ol . 18. Af t erassessi ngcont r olr i skatbel owt hemaxi mum l ev el ,anaudi t ordesi r est o seekaf ur t herr educt i oni nt heassessedl ev el ofcont r olr i sk .Att hi st i me,t he audi t orwoul dconsi derwhet her a.I twoul dbeeffici entt oobt ai nanunder st andi ngoft heent i t y’ si nf or mat i on s yst em. b.Theent i t y’ si nt er nal cont r ol shavebeenpl acedi noper at i on. c.Theent i t y’ si nt er nalcont r ol sper t ai nt oanyfinanci al st at ementasser t i ons. d.Addi t i onal evi dent i almat t ersuffic i entt osuppor taf ur t herr educt i oni sl i k el yt o beav ai l abl e. 19. Toobt ai nevi dent i almat t eraboutcont r ol r i sk,anaudi t orsel ect st est sf r om a v ar i et yoft echni quesi ncl udi ng a.I nqui r y . b.Anal yt i cal pr ocedur es. c.Cal cul at i ons. d.Confir mat i on. 20. Whi choft hef ol l owi ngpr ocedur esconcer ni ngaccount sr ecei vabl ewoul dan audi t ormostl i k el yper f or mt oobt ai nevi dent i almat t eri nsuppor tofanassessed l evel ofcont r olr i skbel owt hemaxi mum l evel ? a.Obser vi nganent i t y’ sempl oy eepr epar et heschedul eofpastdueaccount s r ecei vabl e. b.Sendi ngconfir mat i onr equest st oanent i t y’ spr i nci palcust omer st ov er i f yt he exi st enceofaccount sr ecei vabl e. c.I nspect i nganent i t y’ sanal y si sofaccount sr ecei v abl ef orunusualbal ances. d.ompar i nganent i t y’ suncol l ect i bl eaccount sr ecei v abl e.

21. Whi choft hef ol l owi ngi sacont r olt hatmostl i kel ycoul di mpr ov emanagement ’ s abi l i t yt osuper vi secompanyact i vi t i eseffect i vel y?

a.Moni t or i ngcompl i ancewi t hi nt er nal cont r olr equi r ement si mposedby r egul at or ybodi es. b.Li mi t i ngdi r ectaccesst oasset sbyphysi calsegr egat i onandpr ot ect i v e devi ces . c.Est abl i s hi ngbudget sandf or ecast st oi dent i f yv ar i ancesf r om expect at i ons. d.Suppor t i ngempl oy eeswi t ht her esour cesnecessar yt odi schar get hei r r esponsi bi l i t i es.

22. I npl anni nganaudi t ,t heaudi t or ’ sknowl edgeaboutt hedesi gnofr el ev ant cont r ol sshoul dbeusedt o a.I dent i f yt het ypesofpot ent i al mi sst at ement st hatcoul doccur . b.Assesst heoper at i oneffici encyofi nt er nal cont r ol . c.Det er mi newhet hercont r ol shav ebeenci r cumv ent edbycol l usi on. d.Documentt heassessedl evel ofcont r olr i sk. 23. Theobj ect i v eoft est sofdet ai l soft r ansact i onsper f or medast est sofcont r oli st o a. Moni t ort hedesi gnanduseofent i t ydocument ssuchaspr enumber ed shi ppi ngf or ms . b.Det er mi newhet heri nt er nalcont r ol shavebeenpl acedi noper at i on. c.Det ectmat er i al mi sst at ement si nt heaccountbal ancesoft hefinanci al st at ement s. d.Ev al uat ewhet heri nt er nal cont r ol soper at edeffect i v el y . 24. Tr aci ngshi ppi ngdocument st opr enumber edsal esi nvoi cespr ovi desevi dence t hat a.Nodupl i cat eshi pment sorbi l l i ngsoccur r ed. b.Shi pment st ocust omer swer epr oper l yi nv oi ced. c.Al lgoodsor der edbycust omer swer eshi pped. d.Al l pr enumber edsal esi nv oi ceswer eaccount edf or .

25. Whi choft hef ol l owi ngcont r ol smostl i kel ywoul dr educet her i skofdi ver si onof cust omerr ecei pt sbyanent i t y’ sempl oy ees ? a.Abankl ockboxsy st em. b.Pr enumber edr emi t t anceadvi ces .

c.Mont hl ybankr econci l i at i on. d.Dai l ydeposi tofcashr ecei pt s. 26. Whi choft hef ol l owi ngaudi tpr ocedur eswoul danaudi t ormostl i k el yper f or mt o t estcont r ol sr el at i ngt omanagement ’ sasser t i onconcer ni ngt hecompl et enessof sal est r ansact i ons ? a.Ver i f yt hatext ensi onsandf oot i ngsont heent i t y’ ssal esi nv oi cesandmont hl y cust omerst at ement shavebeenr ecomput ed. b.I nspectt heent i t y’ sr epor t sofpr enumber edshi ppi ngdocument st hathav e notbeenr ecor dedi nt hesal esj our nal . c.Compar et hei nv oi cedpr i cesonpr enumber edsal esi nv oi cest ot heent i t y’ s aut hor i z edpr i cel i st . d.I nqui r eaboutt heent i t y’ scr edi tgr ant i ngpol i c i esandt heconsi st ent appl i cat i onofcr edi tchecks . 27. Anaudi t or ’ sl et t eri ssuedonr epor t abl econdi t i onsr el at i ngt oanent i t y’ si nt er nal cont r ol obser veddur i ngafinanci alst at ementaudi tshoul d a.I ncl udeabr i efdescr i pt i onoft het est sofcont r ol sper f or medi nsear chi ngf or r epor t abl econdi t i onsandmat er i al weaknesses. b.I ndi cat et hatt her epor t abl econdi t i onsshoul dbedi s cl osedi nt heannual r epor tt ot heent i t y’ sshar ehol der s. c.I ncl udeapar agr aphdescr i bi ngmanagement ’ sasser t i onconcer ni ngt he effect i venessofi nt er nal cont r ol . d.I ndi cat et hatt heaudi t ’ spur posewast or epor tont hefinanci alst at ement sand nott opr ovi deassur anceoni nt er nal cont r ol . 28. Whi choft hef ol l owi ngcont r ol smostl i kel yaddr essest hecompl et enessasser t i on f ori nv ent or y? a.Wor ki npr ocessaccounti sper i odi cal l yr econci l edwi t hsubsi di ar yr ecor ds. b.Empl oy eesr esponsi bl ef orcust odyoffini shedgoodsdonotper f or mt he r ecei vi ngf unct i on. c.Recei v i ngr epor t sar epr enumber edandper i odi cal l yr econci l ed. d.Ther ei ssepar at i onofdut i esbet weenpayr ol l depar t mentandi nvent or y account i ngper sonnel . 29. I nobt ai ni nganunder st andi ngofanent i t y’ scont r ol st hatar er el ev antt oaudi t pl anni ng,anaudi t ori sr equi r edt oobt ai nknowl edgeaboutt he a.Desi gnoft hecont r ol si ncl udedi nt hei nt er nal cont r olcomponent s. b.Effect i venessoft hecont r ol st hathav ebeenpl acedi noper at i on c.Consi st encywi t hwhi cht hecont r ol sar ecur r ent l ybei ngappl i ed. d.Cont r ol sr el at edt oeachpr i nci palt r ansact i oncl assandaccountbal ance.

30. Dur i ngt heconsi der at i onofi nt er nal cont r oli nafinanci al st at ementaudi t ,an audi t ori snotobl i gat edt o a.Sear chf orsi gni ficantdefici enc i esi nt heoper at i onoft hei nt er nal cont r ol . b.Under st andt hei nt er nalcont r ol andt hei nf or mat i onsy st em. c.Det er mi newhet hert hecont r ol sr el ev antt oaudi tpl anni nghav ebeenpl acedi n oper at i on. d. Per f or m pr ocedur est ounder st andt hedesi gnofi nt er nal cont r ol s....