Day 22 Flashcards
Identify the Internal Control Component: Authorization of transactions
Existing Control Activities
TBS-006010
Identify the Internal Control Component: Participation of those charged with governance
Control Environment
TBS-006010
Identify the Internal Control Component: Internal audit function
Monitoring
TBS-006010
Identify the Internal Control Component: Assignment of authority, responsibility, and accountability
Control Environment
TBS-006010
Identify the Internal Control Component: Adoption of new accounting principles
Risk assessment
TBS-006010
Identify the Internal Control Component: Proper presentation of transactions and related disclosures
Information and communication systems
TBS-006010
Identify the Internal Control Component: New personnel
Risk assessment - creates a risk that needs to be identified and evaluated as part of the organization’s risk assessment
TBS-006010
Identify the Internal Control Component: Segregation of duties
Existing control activities
TBS-006010
Identify the Internal Control Component: Human resource policies and practices
Control environment
TBS-006010
Identify the Internal Control Component: Incorporation of new technology
Risk Assessment
TBS-006010
Identify the Internal Control Component: Pre-numbering of documents
Existing control activities
TBS-006010
Identify the Internal Control Component: Measurement and recording of proper monetary values
Info & Communication systems - used to measure and record transactions at their proper value
TBS-006010
Identify the Internal Control Component: The way in which significant events are captured by the account system
Info & Communication Systems
TBS-006010
Identify the Internal Control Component: Operating performance reviews
Existing Control Activities
TBS-006010
Identify the Internal Control Component: Corporate Restructuring
Risk Assessment
TBS-006010
Equation: Mean-per-Unit Estimation point estimate
Mean-per-Unit estimation = Average Audited Value × Number of items in Population
TBS-765700
Equation: Ratio Estimation point estimate
Ratio Estimation = (Audited Value of Sample / Book Value of Sample) × Total Book Value
TBS-765700
Equation: Difference Estimation point estimate
Step 1: Calculate Projected Error = [(Book Value of Sample – Audited Value of Sample) / Number of Items Audited] × Population of Items
Step 2: Calculate Point Estimate = Total Book Value of Population – Projected Error
TBS-765700
Opinion Type: (Internal Controls Audit) The auditors concluded that the ineffectiveness of the design of controls over AP and Cash Disbursements represent a material weakness in Internal Control even though the FS are not materially misstated.
A Material Weakness in Internal Controls = Adverse Opinion on the Internal Controls
TBS-010011
Opinion Type: (Internal Controls Audit) Mgmt has not provided assurance that there are no material weaknesses in controls. Subsequent tests revealed no material weaknesses exist.
In an Internal Control Audit, Mgmt is required to provide an assertion about the effectiveness of Internal Controls. However, an Unqualified Opinion is issued if the auditor does NOT find any Material Weaknesses
TBS-010011
Equation: Inventory Turnover
Inventory turnover = COGS / Average Inventory
MCQ-02628
For effective internal control, the AP dept should compare the information on each Vendor’s Invoice with:
Receiving Report and the Purchase Order
MCQ-03169
