Assignemnt Problems
Reminder - I do not allow direct quotes in student's work in this class. You need to paraphrase and cite your outside sources. "Outside sources" do not include the text and so you don't need to cite it. Type your answers into this document, rename it, and upload it to the assignment.
1) For each of the following questions taken from an internal control evaluation questionnaire, provide the following four pieces of information:
a) Identify what transaction-related audit objective is supported by each control if it is effective. Be sure to explain how the control supports the objective.
b) Describe one test of controls auditors could use to test the effectiveness of the control.
c) Identify the possible misstatementthat might occur if each control were not effective, to include the accounts involved and how whether they would be over or understated, and explain how the misstatement would result from the control weakness.
d) Describe on test of substantive audit procedure that might determine if a material misstatement exists due to the failure of the control. Make sure you answer is clear about how the test would work.
Fill in the following table to present your answer.
Hint: Your answers need to be clear about how the control procedure implied by each question would work and what transaction-related audit objective(s) would be supported by that control procedure as well as how your tests would map onto that objective and test for the specific material misstatement(s) you mention in c). In general, everything on each row needs to fit together.