1. Which one of thefollowing is FALSE about Internal Control EvaluationChecklist

Question

1. Which one of thefollowing is FALSE about Internal Control EvaluationChecklists

(ICEC)?

a. ICEC is developedto overcome the shortcomings of Internal Control

Questionnaire

b. The rules ofconstructing ICEC is different than construction ofInternal

ControlQuestionnaire

c. It is designed todetermine; whether desirable internal controls arepresent

d. It is normallyemployed where system’s information has alreadybeen

recorded

2. Which one of thefollowing examples constitutes the most reliable piece ofaudit

evidence available toan auditor?

a. A writtenconfirmation from a bank

b. A supplier’sinvoice kept in the client's records

c. A duplicate salesreceipt dated and signed

d. A receiptedshipping document

3. Inquiries ofwarehouse personnel concerning possible obsolete orslow-moving

inventories provideassurance about which one of the following management's

assertions?

a.Completeness

b.Existence

c.Valuation

d.Presentation

4. A well designedInternal Control Questionnaire (ICQ) should incorporatethe

followingEXCEPT:

a. Be a sufficientsource of data for the evaluation of internal controls

b. Be organized byindividual functional organizations

c. Identify theinternal control system’s strengths and weaknesses

d. Should includesimple yes or no responses but not narrative responses

5. Test of controlscomprise of testing all of the following three thingsEXCEPT:

a. Design

b. Operatingefficiency

c.Implementation

d. Operatingeffectiveness

6. Which one of thefollowing is an alternative name for ‘Test ofcontrols’?

a. Analyticalprocedures

b. Compliancetests

c. Controlprocedures

d. Substantivetests

7. Techniques of AuditTests include all of the following EXCEPT:

a.Inspection

b.Observation

c.Examination

d.Computation

8. Reliability ofaudit evidence is influenced by all of the following factorsEXCEPT:

a. Source of theinformation

b.Timeliness

c. Quantity

d.Objectivity

e.

9. Auditors can useseveral types of audit procedures to test controls. Which one ofthe

following type ofaudit procedures is least likely to be used during tests ofcontrols?

a. Inquiries of clientpersonnel

b. Examination ofdocuments, records, and reports

c. Physicalexamination of assets

d. Observation ofcontrol-related activities

10. The variousmethods of ascertaining and documenting the internal control systemof

an entity include allof the following EXCEPT:

a. Organizationcharts

b. Organizationprocess graph

c. Internal controlquestionnaires (ICQs)

d. Internal controlevaluation checklists (ICEC)

Explanation / Answer

1. (b) The rules of constructing ICEC is different thanconstruction of Internal Control questionnaire
2. (a) A written confirmation from a bank
3. (a) Completeness
4. (c ) Identify the internal control system’s strengths andweaknesses
5. (b) Operating efficiency
6. (d) Substantive tests
7. (a) Inspection
8. (d) Objectivity
9. (c ) Physical examination of assets
10. (b) Organization process graph

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