1.

An auditor would assess a client’s internal control except

A.to assert the controls complied by the management are effective
B.to assert the controls complied by relevant standards
C.to assert the controls that are properly executed
D.to assert the controls for window dressing

2. An internal control system embraces the _______ and ________ procedures.

A.organization….structure
B.control environment…..internal control
C.management process….internal audit
D.internal control……internal audit

3. A sound internal control is important for a company to ______, _______,_____ and report external financial data
reliably in accordance with generally accepted accounting principles.
A.authorize, record, process
B.check, organize, plan
C.plan, record, authorize
D.process, check, execute

4. A sound internal control system will actually help the organisation to exert control over their business process to
remain functional and operational. What are the key benefits that would be beneficial to an organization? I achieve high
standards in the business process II better risk management III compliance with laws and regulation IV better
communication with employees V more stakeholders
A.I, II, III
B.II, III, IV
C.I, II, III, IV
D.II, III, IV, V

5. How many types of controls exist in internal control?

A.1
B.2
C.3
D.4

6. What are the types of control identified in an internal control system?

A.Inherent and coherent
B.Preventive and detective
C.Preventive and deterrence
D.Safeguarding and elimination
7. Responsibilities to maintain a good internal control system falls within the
A.internal audit
B.board of directors
C.stakeholders
D.external auditor

8. How does the internal control system information assist external auditors in their work?
A.The external auditor will request information from the internal auditor on internal control of client
B.The internal control information is useful when planning for procedures
C.The external auditor will request to conduct an audit on internal control over financial reporting
D.The internal control will be useful for determining the level of compliance.

9. Conducts ongoing and or separate evaluation Evaluate Communicate deficiencies Assessing quality of
system’s performance over time Identify the appropriate control component for the above elements.
A.Control environment
B.Control activities
C.Information and communication
D.Monitoring

10. How do you think the external auditor’s reliance on work of the internal auditor may reduce the work of the
external auditor? I May assist external auditor to do less field work II The external auditor will easily focus on high risk
areas III Audit risk may easily be identified IV Help alleviate business risks that can affect the company’s profitability
V Able to detect shortcomings or pitfalls of internal control
A.I, II, III
B.IV, V
C.II, III
D.All of the above

11. There are two factors that determine the auditability of a client’s company. These would determine how
an audit would be carried out.
A.The integrity of the management and the adequacy of accounting records.
B.The integrity of the management and the creditworthiness of the client.
C.The adequacy of accounting records and their internal audit department.
D.The internal auditor’s superiority and management override.

12. I Must assess whether they have the necessary skills to gather evidence II Assign personnel with adequate IT
training and experience III Make the preliminary assessment for each transaction-related audit objective for each major
type of transaction in each transaction cycle. IV Accounts receivable master file reconciled with the general ledger on a
monthly basis. V Existing sales are recorded In complex IT environments, most of the transaction information is
available only in electronic form without generating visible audit trail of documents and records. Auditors should
A.I, II
B.I, II, III
C.I, II, III, IV
D.All of the above
13. Auditors must evaluate whether key controls are absent in the design of internal control over financial reporting as
part of evaluating control risk and the likelihood of financial statement misstatements. I An operation deficiency exists if
a well-designed control does not operate as designed or if the person performing the control is insufficiently qualified or
authorised II A significant deficiency exists if one or more control deficiencies exist that results in more than a remote
likelihood that a misstatement is more than inconsequential III If the auditor concludes that one or more control
deficiencies for a specific objective does not exceed the more than remote level or are inconsequential, they can be
ignored IV A control deficiency exists if the design or operation of controls does not permit company personnel to
prevent or detect misstatements on a timely basis. V Each significant deficiency or material weakness can apply to only
one related objective.
A.All of the above
B.I, II, III, IV
C.I, II, III
D.I, II, IV

14. Those charged with governance are

A.Management’s identification and analysis of risks relevant to the preparation and analysis of risks relevant to the
preparation of financial statements in accordance with generally accepted accounting principles.
B.The person(s) with responsibility for overseeing the strategic direction of the entity and its obligations
related to the accountability of the entity, including overseeing the financial reporting and disclosure process
C.Board of directors
D.Internal auditors and audit committee

15. Test of control involves

A.Companywide policies for the approval of all transactions within stated limits
B.Internal control activities designed for the continuous internal verification of other control
C.Audit procedures to test the operating effectiveness of controls in support of reduced assessed control risk
D.Controls that are expected to have the greatest effect on meeting the audit objectives