1. The personnel in the receiving department should a.

Be supervised by the head of the storeroom, since it is the storeroom personnel who are responsible for the physical control of goods b. Be supervised by the accounting department, since it is the accounting personnel who are responsible for the accuracy of the records about the goods c. Be independent of both the storeroom and accounting functions d. Be supervised by the Shipping department since the receiving docks and the shipping docks are in close proximity 2. What is an auditors evaluation of statistical sample for attributes when a test of 50 documents result in 3 deviations if tolerable rate is 7%, the expected population deviation arte is 5%, and the allowance for sampling risk is 2%? a. Modify the planned assessed level of control risk because the tolerable rate plus the allowance for sampling risk exceeds the expected population deviation rate. b. Accept the sample results as support for the planned assessed level of control risk because the sample deviation rate plus the allowance for sampling risk exceeds the tolerable rate c. Accept the sample results as support for the planned assessed level of control risk because the tolerable rate less the allowance for sampling risk equals the expected population deviation rate. d. Modify the planned assessed level of control risk because the sample deviation rate plus the allowance for sampling risk exceeds the tolerable rate. 3. In government auditing, the three elements of expanded scope auditing are a. Goal analysis, audit of operations, audit of systems b. Financial and compliance, economy and efficiency, program results c. Pre-audit, post audit, internal audit d. National government audit, local government audit, corporation audit 4. One of the conditions required for an accountant to submit a written personal financial plan containing unaudited financial statements to a client without complying with the requirements of SSARS 1 (Compilation and Review of Financial Statements) is that the a. Client agrees that the financial statements will not be used to obtain credit b. Accountant compiled or reviewed the clients financial statements for the immediate prior year c. Engagement letter acknowledges that the financial statements will contain departures from generally accepted accounting principles d. Accountant express limited assurance that the financial statements are free of any material misstatements 5. Which of the following is an effective internal accounting control measure that encourages receiving department personnel to count and inspect all merchandise received? a. Quantities ordered are excluded from the receiving department copy f the purchase order b. Vouchers are prepared by accounts payable department personnel only after they match item accounts on the receiving report with the purchase order c. Receiving department personnel are expected to match and reconcile the receiving report with the purchase order d. Internal auditors periodically examine on a surprise basis, the receiving department copies of receiving reports 6. When using sampling test of controls, which of the following audit consequences may follow? a. If sample results indicate that compliance is adequate, but in fact it is not, control risk will be assessed too low b. If sample results indicate that compliance is adequate, but in fact it is not, control risk will be assessed too high c. If sample results indicate that compliance is inadequate, but in fact it is adequate, the audit is likely to be faulty because of reduced substantive tests d. If sample results indicate that compliance is inadequate, but in fact it is adequate, control risk will be assessed too low. 7.