ACC 544 Believe Possibilities / snaptutorial.com

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ACC 544 Week 1 Individual Assignment Recommendation Brief for an
Internal Accountant
ACC 544 Week 2 Individual Assignment Justification for an Internal
Control System
ACC 544 Week 3 Individual Assignment Checklist for Evaluating
Internal Controls
ACC 544 Week 4 Learning Team Assignment Controls for Inflows
ACC 544 Week 5 Learning Team Assignment Controls for Outflows
ACC 544 Week 6 Individual Assignment Controls for Information
Technology (IT) and Reporting and Evaluation
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ACC 544 Quiz 1
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ACC 544 Quiz 1
• Question 1 Imperial Corp. is offering $450,000 of its securities
under Rule 504 of Regulation D of the Securities Act of 1933. Under
Rule 504, Imperial is required to
• Question 2 A $10,000,000 offering of corporate stock intended to
be made pursuant to the provisions of Rule 506 of Regulation D of the
Securities Act of 1933 would not be exempt under Rule 506 if
• Question 3 Under Section 12 of the Securities Exchange Act of
1934, in addition to companies whose securities are traded on a national
exchange, what class of companies is subject to the SEC’s continuous
disclosure system?
• Question 4 Tweed Manufacturing, Inc. plans to issue $10 million of
common stock to the public in interstate commerce after its registration
statement with the SEC becomes effective. What, if anything, must
Tweed do in respect to those states in which the securities are to be sold?
• Question 5 Acme Corp. intends to make a public offering in several
states of 250,000 shares of its common stock. Under the Securities Act
of 1933,
• Question 6 Which of the following statements is correct with respect
to the Securities Exchange Act of 1934?
• Question 7 Under the Securities Act of 1933, an accountant may be
held liable for any materially false or misleading financial statements,
including an omission of a material fact therefrom, provided the
purchaser

• Question 8 Regulation D of the Securities Act of 1933 is available to
issuers without regard to the dollar amount of an offering only when the
• Question 9 The provisions of the Securities Exchange Act of 1934
• Question 10 Which of the following is required under the Securities
Exchange Act of 1934 or the SEC’s reporting requirements issued
pursuant thereto?
• Question 11 Under the provisions of the Securities Exchange
Act of 1934, a corporation whose common stock is listed on a national
stock exchange
• Question 12 Which of the following are exempt from the registration
requirements of the Securities Act of 1933?
• Question 13 Wane Corporation has issued securities that are traded on
a national securities exchange. Wane just had a significant change in its
assets due to a large acquisition of real property. Which of the following
is true?
• Question 14 Which of the following statements is(are) correct
concerning issuers of securities registered under the Securities Exchange
Act of 1934?
• Question 15 Under Regulation D of the Securities Act of 1933, what is
the maximum time period during which an exempt offering may be
made?
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ACC 544 Quiz 2

ACC 544 Quiz 2
• Question 1 Mead Corp. orally engaged Dex& Co., CPAs, to audit its
financial statements. The management of Mead informed Dex that it
suspected that the accounts receivable were materially overstated.
Although the financial statements audited by Dex did, in fact, include a
materially overstated accounts receivable balance, Dex issued an
unqualified opinion. Mead relied on the financial statements in deciding
to obtain a loan from City Bank to expand its operations. City relied on
the financial statements in making the loan to Mead. As a result of the
overstated accounts receivable balance, Mead has defaulted on the loan
and has incurred a substantial loss. If Mead sues Dex for negligence in
failing to discover the overstatement, Dex’s best defense would be that
• Question 2 Doe and Co., CPAs, issued an unqualified opinion on the
2012 financial statements of Marx Corp. These financial statements
were included in Marx’s annual report and Form 10K filed with the
SEC. Doe did not detect material misstatements in the financial
statements as a result of negligence in the performance of the audit.
Based upon the financial statements, Fitch purchased stock in Marx.
Shortly thereafter, Marx became insolvent, causing the price of the stock
to decline drastically. Fitch has commenced legal action against Doe for
damages based upon Section 10(b) and Rule 10b-5 of the Securities
Exchange Act of 1934. Doe’s best defense to such an action would be
that
• Question 3 A CPA firm was negligent in the audit of financial
statements contained in a Form 10-K filed with the SEC. If an injured

third party decided to file suit against the CPA, it would most likely be
filed under
• Question 4 Dexter and Co., CPAs, issued an unqualified opinion on
the 2012 financial statements of Bart Corp. Late in 2010, Bart
determined that its treasurer had embezzled over $1,000,000. Dexter was
unaware of the embezzlement. Bart has decided to sue Dexter to recover
the $1,000,000. Bart’s suit is based upon Dexter’s failure to discover the
missing money while performing the audit. Which of the following is
Dexter’s best defense?
• Question 5 Hugh, CPA, has developed an opinion for which tax
avoidance is a significant purpose that is marketed to potential
investors. According to Treasury Department Circular 230
• Question 6 Under the liability provisions of Section 11 of the
Securities Act of 1933, a CPA who certifies financial statements
included in a registration statement generally will not be liable to a
purchaser of the security
• Question 7 Which of the following circumstances is a defense to an
accountant’s liability under Section 11 of the Securities Act of 1933 for
misstatements and omissions of material facts contained in a registration
statement?
• Question 8 A CPA partnership may, without being lawfully
subpoenaed or without the client’s consent, make client workpapers
available to
• Question 9 An accounting firm was hired by a company to perform
an audit. The company needed the audit report in order to obtain a loan
from a bank. The bank lent $500,000 to the company based on the
auditor’s report. Fifteen months later, the company declared bankruptcy
and was unable to repay the loan. The bank discovered that the
accounting firm failed to discover a material overstatement of assets of

the company. Which of the following statements is correct regarding a
suit by the bank against the accounting firm? The bank
• Question 10 In accordance with the AICPA Statements on Standards
for Tax Services, if after having provided tax advice to a client there are
legislative changes which affect the advice provided, the CPA
• Question 11 Alex Stone, CPA, prepared Ray Pym’s 2012 federal
income tax return. Pym advised Stone that he had paid doctors’ bills of
$15,000 during 2012, when in fact Pym had paid only $3,000 of bills.
Based on Pym’s representations, Stone properly computed the medical
expense deduction, with consequent understatement of tax liability of
more than $5,000. Pym’s total tax liability shown on the return was
$40,000. Stone had no reason to doubt the accuracy of Pym’s figures,
although Stone did not request documentation for the expenses claimed;
but he was assured by Pym that sufficient corroborative evidence of
these expenses existed. In connection with Stone’s preparation of Pym’s
2012 return, Stone is
• Question 12 The Ultramares decision is a leading case that helps define
when a CPA is liable to different parties. If a CPA has committed
negligence, under this decision the CPA is liable to which of the
following parties?
• Question 13 Clark, a professional tax return preparer, prepared and
signed a client’s 2012 federal income tax return that resulted in a $600
refund. Which one of the following statements is correct with regard to
an Internal Revenue Code penalty Clark may be subject to for endorsing
and cashing the client’s refund check?
• Question 14 Jay, CPA, gave an unqualified opinion on Nast Power
Co.’s financial statements. Larkin bought Nast bonds in a public
offering subject to the Securities Act of 1933. The registration statement
filed with the SEC included Nast’s financial statements. Larkin sued Jay
for misstatements contained in the financial statements under the

provisions of Section 11 of the Securities Act of 1933. To prevail,
Larkin must prove
• Question 15 The Joint Ethics Enforcement Program involves joint
enforcement of the ethics rules of
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ACC 544 Quiz 3
ACC 544 Quiz 3
• Question 1 Which of the following statements about investment
decision models is true?
• Question 2 Which of the following events would decrease the
internal rate of return of a proposed asset purchase?
• Question 3 Which of the following is a disadvantage of the internal
rate of return as a method of evaluating investments?
• Question 4 Net present value (NPV) and internal rate of return (IRR)
differ in that

• Question 5 Which of the following characteristics represent an
advantage of the internal rate of return technique over the accounting
rate of return technique in evaluating a project?
• Question 6 It is assumed that cash flows are reinvested at the rate
earned by the investment in which of the following capital budgeting
techniques?
• Question 7 Which of the following changes would result in the
highest present value?
• Question 8 Which of the following is an advantage of net present
value modeling?
• Question 9 The Bread Company is planning to purchase a new
machine which it will depreciate on a straight-line basis over a 10-year
period. A full year’s depreciation will be taken in the year of acquisition.
The machine is expected to produce cash flow from operations, net of
income taxes, of $3,000 in each of the 10 years.; The accounting (book
value) rate of return is expected to be 10% on the initial increase in
required investment. The cost of the new machine will be
• Question 10 Net present value as used in investment decision-making
is stated in terms of which of the following options?
• Question 11 On January 1, 2012, Colt Company issued 10-year bonds
with a face amount of $1,000,000 and a stated interest rate of 8%
payable annually on January 1. The bonds were priced to yield 10%.
Present value factors are as follows:
• Question 12 Assume that management of Trayco has generated the
following data about an investment project that has a five-year life:

• Question 14 Which of the following statements is correct regarding
payback method as a capital budgeting technique?
• Question 15 A client wants to know how many years it will take
before the accumulated cash flows from an investment exceed the initial
investment, without taking the time value of money into account. Which
of the following financial models should be used?
• Question 16 Which of the following limitations is common to the
calculations of payback period, discounted cash flow, internal rate of
return, and net present value?
• Question 17 A project has an initial outlay of $1,000. The projected
cash inflows are
• Question 18 Harvey Co. is evaluating a capital investment proposal
for a new machine. The investment proposal shows the following
information:
• Question 19 How are the following used in the calculation of the net
present value of a proposed project? Ignore income tax considerations.
• Question 20 In considering the payback period for three projects, Fly
Corp. gathered the following data about cash flows:
• Question 21 The discount rate (hurdle rate of return) must be
determined in advance for the
financial decision making?
• Question 23 Which of the following is necessary in order to calculate
the payback period for a project?
• Question 24 An efficient portfolio is one that

• Question 25 Which of the following scenarios would encourage a
company to use short-term loans to retire its ten-year bonds that have
five years until maturity?
• Question 26 What is the formula for calculating the profitability index
of a project?
• Question 27 The profitability index is a variation on which of the
following capital budgeting models?
• Question 29 A company purchases an item for $43,000. The salvage
value of the item is $3,000. The cost of capital is 8%. Pertinent
information related to this purchase is as follows:
• Question 30 A project has a present value of future net cash inflows of
$120,000 and an initial investment of $110,000. Calculate the excess
present value index for the project.
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ACC 544 Quiz 4
ACC 544 Quiz 4

• Question 1 Central Winery manufactured two products, A and B.
Estimated demand for product A was 10,000 bottles and for product B
was 30,000 bottles. The estimated sales price per bottle for A was $6.00
and for B was $8.00. Actual demand for product A was 8,000 bottles
and for product B was 33,000 bottles. The actual price per bottle for A
was $6.20 and for B was $7.70. What amount would be the total selling
price variance for Central Winery?
• Question 2 A defense contractor for a government space project has
incurred $2,500,000 in actual design costs to date for a guidance system
whose total budgeted design cost is $3,000,000. If the design phase of
the project is 60% complete, what is the amount of the contractor’s
current overrun/savings on this design work?
• Question 3 After the goals of the company have been established and
communicated, the next step in the planning process would be the
development of the
• Question 4 Birney Company is planning its advertising campaign for
2012 and has prepared the following budget data based on a zero
advertising expenditure:
• Question 5 The cash receipts budget includes
• Question 6 Breakeven analysis assumes over the relevant range that
• Question 7 An increase in production levels within a relevant range
most likely would result in
• Question 8 The process of developing plans for a company’s
expected operations and controlling the operations to help carry out
those plans is known as

• Question 9 Sussex Company has budgeted its operations for
February 2012. No change in inventory level during the month is
planned. Selected data from estimated amounts are as follows:
• Question 10 A company is attempting to determine if there is a cause
and effect relationship between scrap value and output produced. The
following exhibit presents the company’s scrap data for the last fiscal
year:
• Question 11 A professional organization is planning to conduct a
series of one-day continuing education programs in various cities. The
projected costs related to these programs are
• Question 12 A company wants to determine its marketing costs for
budgeting purposes. Activity measures and costs incurred for four
months of the current year are presented in the table below. Advertising
is considered to be a discretionary cost. Salespersons are paid monthly
salaries plus commissions. The sales force was increased from 20 to 21
individuals during the month of May.
• Question 13 Ajax Division of Carlyle Corporation produces electric
motors, 20% of which are sold to Bradley Division of Carlyle and the
remainder to outside customers. Carlyle treats its divisions as profit
centers and allows division managers to choose their sources of sale and
supply. Corporate policy requires that all interdivisional sales and
purchases be recorded at variable cost as a transfer price. Ajax
Division’s estimated sales and standard cost data for the year ending
December 31, 2012, based on the full capacity of 100,000 units, are as
follows:
• Question 14 Light Company has 2,000 obsolete light fixtures that are
carried in inventory at a manufacturing cost of $30,000. If the fixtures
are reworked for $10,000, they could be sold for $18,000. Alternately,
the light fixtures could be sold for $3,000 to a jobber located in a distant
city. In a decision model analyzing these alternatives, the opportunity
cost would be

• Question 15 Multiple regression differs from simple regression in that
it
• Question 16 Gata Co. plans to discontinue a department with $48,000
contribution to overhead, and allocated overhead of $96,000, of which
$42,000 cannot be eliminated. What would be the effect of this
discontinuance on Gata’s pretax profit?
• Question 17 A professional organization is planning to conduct a
series of one-day continuing education programs in various cities. The
projected costs related to these programs are
• Question 18 Rodder, Inc. manufactures a component in a router
assembly. The selling price and unit cost data for the component are as
follows:
• Question 19 Lincoln Company, a glove manufacturer, has enough idle
capacity available to accept a special order of 20,000 pairs of gloves at
$12.00 a pair. The normal selling price is $20.00 a pair. Variable
manufacturing costs are $9.00 a pair, and fixed manufacturing costs are
$3.00 a pair. Lincoln will not incur any selling expenses as a result of
the special order. What would be the effect on operating income if the
special order could be accepted without affecting normal sales?
• Question 20 JacKue Co. plans to produce 200,000 pairs of roller
skates during January of next year. Planned production for February is
250,000 pairs. Sales are forecasted at 180,000 pairs for January and
240,000 pairs for February. Each pair of roller skates has eight wheels.
JacKue’s policy is to maintain 10% of the next month’s production in
inventory at the end of a month. How many wheels should JacKue
purchase during January?
• Question 21 Which of the following is a characteristic of a flexible
budget?

• Question 22 All else being equal, the breakeven point in units will be
higher if
• Question 23 The ratio of fixed costs to the contribution margin is
• Question 24 Oslo Co.’s industrial photo-finishing division, Rho,
incurred the following costs and expenses in 2012:
• Question 25 Crisper, Inc. plans to sell 80,000 bags of potato chips in
June, and each of these bags requires five potatoes. Pertinent data
includes:
• Question 26 At annual sales of $900,000, the Ebo product has the
following unit sales price and costs:
• Question 27 Which of the following is a disadvantage of participative
budgeting?
• Question 28 For the current period production levels, Woodwork Co.
budgeted 11,000 board feet of production and purchased 15,000 board
feet. The material cost was budgeted at $7 per foot. The actual cost for
the period was $8.50 per foot. What was Woodwork’s material price
variance for the period?
• Question 29 In the past, four direct labor hours were required to
produce each unit of product Y. Material costs were $200 per unit, the
direct labor rate was $20 per hour, and factory overhead was 3 times
direct labor cost. In budgeting for next year, management is planning to
outsource some manufacturing activities and to further automate others.
Management estimates that these plans will reduce labor hours by 25%,
increase the factory overhead rate to 3.6 times direct labor costs, and
increase material costs by $30 per unit. Management plans to
manufacture 10,000 units. What amount should management budget for
cost of goods manufactured?
• Question 30 A company produces widgets with budgeted standard
direct materials of 2 pounds per widget at $5 per pound. Standard direct

labor was budgeted at 0.5 hour per widget at $15 per hour. The actual
usage in the current year was 25,000 pounds and 3,000 hours to produce
10,000 widgets. What was the direct labor usage variance?
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ACC 544 Week 1 Coso Framework (2 Papers)
This Tutorial contains 2 Papers
Imagine you are the Director of Internal Audit and the Chairman of the
Audit Committee and asks you to prepare a report for the Board of
Directors explaining the 2012 COSO framework for internal control and
the benefits for adopting the framework.
• Write a report of approximately 700 to 1,050 words explaining the
five interrelated components of internal control.
• Describe the benefits for adopting this framework.
• Justify why this is the appropriate framework and will encourage
integrity and ethical values for the organization.
• ===============================================
•

ACC 544 Week 1 Individual Assignment
Recommendation Brief for an Internal Accountant
A client has an out-of-control system. A recommendation has been made
to hire an internal accountant.
• Write a recommendation brief of no more than 700 words for the
client, justifying the benefits of using an internal auditor.
• Conclude your recommendation by referring a person for the job
based on their background.
• Explain how the background benefits the client.
• ===============================================
ACC 544 Week 2 Individual Assignment
Justification for an Internal Control System
Leadership confronts you, as a controller, and questions the need for an
internal control system.

• Write a report of no more than 700 words, justifying the need for
the system when controls are in place with insurance and portfolio
approaches.
• Explain why current approaches are valid but why an internal
system will be more beneficial.
• ===============================================
ACC 544 Week 2 Risk Assessment (2 Papers)
The Chief Risk Officer has asked you to perform an enterprise-wide risk
assessment.
· Write a proposal of approximately 700 to 1,050 words that shows
your plan for the risk assessment project.
· Identify risk areas and the criteria to be used to determine
likelihood, magnitude, velocity, and persistence.
· Link risk categories to financial statement assertions.
· Include fraud risks and the incentives, opportunities, and
rationalization related to fraud.

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ACC 544 Week 3 Individual Assignment Checklist
for Evaluating Internal Controls
• Prepare a comprehensive checklist for evaluating internal controls.
• Apply the checklist to outline phases of the control evaluation.
• ===============================================
•
ACC 544 Week 3 Quiz Federal Securities
ACC 544 Week 3 Quiz Federal Securities

• Question 1 Imperial Corp. is offering $450,000 of its securities under
Rule 504 of Regulation D of the Securities Act of 1933. Under Rule 504,
Imperial is required to
• Question 2 A $10,000,000 offering of corporate stock intended to be
made pursuant to the provisions of Rule 506 of Regulation D of the
Securities Act of 1933 would not be exempt under Rule
• Question 3 Under Section 12 of the Securities Exchange Act of 1934,
in addition to companies whose securities are traded on a national
exchange, what class of companies is subject to the SEC’s continuous
disclosure system?
• Question 4 Tweed Manufacturing, Inc. plans to issue $10 million of
common stock to the public in interstate commerce after its registration
statement with the SEC becomes effective. What, if anything, must
Tweed do in respect to those states in which the securities are to be sold?
• Question 5 Acme Corp. intends to make a public offering in several
states of 250,000 shares of its common stock. Under the Securities Act
of 1933,
• Question 6 Which of the following statements is correct with respect
to the Securities Exchange Act of 1934?
• Question 7 Under the Securities Act of 1933, an accountant may be
held liable for any materially false or misleading financial statements,
including an omission of a material fact therefrom, provided the
purchaser
• Question 8 Regulation D of the Securities Act of 1933 is available to
issuers without regard to the dollar amount of an offering only when the
• Question 9 The provisions of the Securities Exchange Act of 1934

• Question 10 Which of the following is required under the Securities
Exchange Act of 1934 or the SEC’s reporting requirements issued
pursuant thereto?
• Question 11 Under the provisions of the Securities Exchange Act of
1934, a corporation whose common stock is listed on a national stock
exchange
• Question 12 Which of the following are exempt from the registration
requirements of the Securities Act of 1933?
• Question 13 Wane Corporation has issued securities that are traded on
a national securities exchange. Wane just had a significant change in its
assets due to a large acquisition of real property. Which of the following
is true?
• Question 14 Which of the following statements is(are) correct
concerning issuers of securities registered under the Securities Exchange
Act of 1934?
• Question 15 Under Regulation D of the Securities Act of 1933, what is
the maximum time period during which an exempt offering may be
made?
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ACC 544 Week 3 Team Developing Internal
Controls (2 Papers)

ACC 544 Week 3 Team Developing Internal Controls
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ACC 544 Week 4 Learning Team Assignment
Controls for Inflows
Design a proposal for appropriate controls to cover cash, sales, accounts
receivable, inventory, and production
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ACC 544 Week 4 Team Internal Control for
purchases, payroll and Fixed Assets (2 Papers)

Include specific internal controls that include authorization of
transactions, segregation of duties, adequate records and documentation,
security of assets, and independent checks and reconciliation for each
business area.
The CFO, has again, asked for your assistance in developing internal
controls, but this time, in the purchases, payroll, and fixed assets
business areas.
Write a report of approximately 1,400 to 2,450 words.
· Describe typical activities
· Create a system of internal controls for the purchases, payroll, and
fixed assets business areas.
· Discuss the associated risk in these areas.
Include specific internal controls that include authorization of
transactions, segregation of duties, adequate records and documentation,
security of assets, and independent checks and reconciliation for each
business area
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ACC 544 Week 5 Learning Team Assignment
Controls for Outflows
Design a proposal for appropriate controls to cover purchasing,
accounts payable, cash disbursements, finance, investment, and
payroll.
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ACC 544 Week 5 Team Asset Governance (2
Papers)

ACC 544 Week 5 Team Asset Governance
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ACC 544 Week 6 Evaluating Internal Controls
(2 Papers)
You have been hired to evaluate internal controls for your client
organization. The CFO for your client wants a report outlining the
evaluation to share with the Board of Directors.
· Evaluate the criteria to identify and report identified control
deficiencies
· Analyze the reporting requirements for both public and private
organizations.
· Paper provides sufficient background on the topic and previews
major points.

· At least three sources are used
· Write a 1,400- to 2,450-word report showing your plan to evaluate
internal controls.
· Evaluate the criteria to identify and report identified control
deficiencies.
· Analyze the reporting requirements for both public and private
organizations.
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ACC 544 Week 6 Individual Assignment Controls
for Information Technology (IT) and Reporting
and Evaluation
• Imagine you are a company controller.
• Identify the internal control reporting options.
• Create criteria against which the options may be evaluated.
• Include internal controls for IT.

• ===============================================
•
ACC 544 Week 6 Quiz (Auditing)
ACC 544 Week 6 Quiz (Auditing)
• Question 1 Which of the following statements most likely represents
a disadvantage for an entity that keeps microcomputer-prepared data
files rather than manually prepared files?
• Question 2 A primary advantage of using generalized audit packages
in the audit of an advanced computer system is that it enables the auditor
to
• Question 3 Which of the following statements most likely represents
a disadvantage for an entity that keeps microcomputer-prepared data
files rather than manually prepared files?
• Question 4 Which of the following client computer systems generally
can be audited without examining or directly testing computer programs
of the system?

• Question 5 An independent auditor studies and evaluates a client's
computer system. The auditor's study includes tests of controls that
might include which of the following?
• Question 6 If a CPA wishes to identify all checks written for an
amount over $1,000,000 that are included in a relational database, a
likely approach to obtaining the list would be through a
• Question 7 Which of the following outcomes is a likely benefit of
information technology used for internal control?
• Question 8 An auditor may decide not to perform tests of controls
related to the computer portion of the client’s controls. Which of the
following would not be a valid reason for choosing to omit tests of
controls?
• Question 9 Which of the following is an advantage of using a value-
added network for EDI transactions?
• Question 10 Which of the following is an auditor’s client most likely to
use to perform queries requested by the auditor of a relational database?
• Question 11 Which of the following are essential elements of the audit
trail in an electronic data interchange (EDI) system?
• Question 12 An auditor may use a "join" command in a database query
to combine
• Question 13 A CPA might find information on the structure of
relational database tables through which language interface?
• Question 14 Which of the following statements is correct concerning
internal control in an electronic data interchange (EDI) system?
• Question 15 Which of the following is usually a benefit of transmitting
transactions in an electronic data interchange (EDI) environment?

• Question 16 Which of the following is usually a benefit of using
electronic funds transfer for international cash transactions?
• Question 17 In building an electronic data interchange (EDI) system,
what process is used to determine which elements in the entity's
computer system correspond to the standard data elements?
the security of messages in an electronic data interchange (EDI) system?
• Question 19 In which of the following circumstances would an auditor
expect to find that an entity implemented automated controls to reduce
risks of misstatement?
• Question 20 Carmel Department Store has an ERP information system
and is planning to issue credit cards to creditworthy customers. To
strengthen internal control by making it difficult for one to create a valid
customer account number, the company’s independent auditor has
suggested the inclusion of a check digit which should be placed
• Question 21 Which of the following characteristics distinguishes
electronic data interchange (EDI) from other forms of electronic
commerce?
• Question 22 Which of the following is an engagement attribute for an
audit of an entity that processes most of its financial data in electronic
form, without any paper documentation?
• Question 23 Which of the following computer-assisted auditing
techniques processes client input data on a controlled program under the
auditor's control to test controls in the computer system?
• Question 24 An auditor would least likely use computer software to
• Question 25 Which of the following statements is not true of the test
data approach to testing an accounting system?

• Question 26 When an auditor tests a computerized accounting system,
which of the following is true of the test data approach?When an auditor
tests a computerized accounting system, which of the following is true
of the test data approach?
• Question 27 A primary advantage of using generalized audit software
packages to audit the financial statements of a client that uses an EDP
system is that the auditor may
• Question 28 Which of the following strategies would a CPA most
likely consider in auditing an entity that processes most of its financial
data only in electronic form, such as a paperless system?
• Question 29 Which of the following is an engagement attribute for an
audit of an entity that processes most of its financial data in electronic
form, without any paper documentation?
• Question 30 Which of the following computer-assisted auditing
techniques processes client input data on a controlled program under the
auditor's control to test controls in the computer
• Question 31 In auditing an entity's computerized payroll transactions,
an auditor would be least likely to use test data to test controls
concerning
• Question 32 Processing data through the use of simulated files
provides an auditor with information about the operating effectiveness of
control policies and procedures.
• Question 33 An auditor would most likely be concerned with which of
the following controls in a distributed data processing system?
• Question 34 A retailing entity uses the Internet to execute and record
its purchase transactions. The entity's auditor recognizes that the
documentation of details of transactions will be retained for only a short
period of time. To compensate for this limitation, the auditor most likely
would

• Question 35 Which of the following is a general control that would
most likely assist an entity whose systems analyst left the entity in the
middle of a major project?
• Question 36 When an auditor tests the internal controls of a
computerized accounting system, which of the following is true of the
test data approach?
• Question 37 Which of the following most likely represents a
significant deficiency in the internal control structure?
• Question 38 Which of the following types of evidence would an
auditor most likely examine to determine whether internal control
structure policies and procedures are operating as designed?
• Question 39 If a control total were computed on each of the following
data items, which would best be identified as a hash total for a payroll
EDP application?
• Question 40 An auditor most likely would test for the presence of
unauthorized EDP program changes by running a
• Question 41 Which of the following controls most likely would assure
that an entity can reconstruct its financial records?
• Question 42 An auditor most likely would introduce test data into a
computerized payroll system to test internal controls related to the
• Question 43 Which of the following controls is a processing control
designed to ensure the reliability and accuracy of data processing?
• Question 44 Which of the following are essential elements of the audit
trail in an electronic data interchange (EDI) system?
• Question 45 Which of the following is an example of a validity check?

• Question 46 Which of the following control procedures most likely
could prevent EDP personnel from modifying programs to bypass
programmed controls?
• Question 47 When evaluating internal control of an entity that
processes sales transactions on the Internet, an auditor would be most
concerned about the
• Question 48 Which of the following procedures would an entity most
likely include in its disaster recovery plan?
• Question 49 An auditor who wishes to capture an entity's data as
transactions are processed and continuously test the entity's
computerized information system most likely would use which of the
following techniques?
• Question 50 In auditing an entity’s computerized payroll transactions,
an auditor would be least likely to use test data to test controls
concerning
• Question 51 Which of the following is a computer-assisted audit
technique that permits an auditor to use the auditor’s version of a client’s
program to process data and compare the output with the client’s output?
• Question 52 Which of the following could be difficult to determine
because electronic evidence may not be retrievable after a specific
period?
• Question 53 When companies use information technology (IT)
extensively, evidence may be available only in electronic form. What is
an auditor’s best course of action in such situations?
• Question 54 When an auditor tests the internal controls of a
computerized accounting system, which of the following is true of the
test data approach?

• Question 55 When conducting fieldwork for a physical inventory, an
auditor cannot perform which of the following steps using a generalized
audit software package?
• Question 56 Which of the following is not a problem associated with
the use of test data for computer-audit purposes?
• Question 57 In parallel simulation, actual client data are reprocessed
using an auditor software program. An advantage of using parallel
simulation, instead of performing tests of controls without a computer, is
that
• Question 58 Which of the following is necessary to audit balances in
an on-line EDP system in an environment of destructive updating?
• Question 59 Which of the following passwords would be most difficult
to crack?
• Question 60 A computer-assisted audit technique that is most likely to
be effective in a continuous auditing environment is
• Question 61 Smith Corporation has numerous customers. A customer
file is kept on disk storage. Each customer file contains name, address,
credit limit, and account balance. The auditor wishes to test this file to
determine whether credit limits are being exceeded. The best procedure
for the auditor to follow would be to
• Question 62 When an auditor tests a computerized accounting system,
which of the following is true of the test data approach?
• Question 63 An audit technique which involves actual analysis of the
logic of a computer program’s processing routines is referred to as
• Question 64 In auditing through a computer, the test data method is
used by auditors to test the

• Question 65 A primary advantage of using generalized audit software
packages to audit the financial statements of a client that uses a
computer system is that the auditor may
• Question 66 Which of the following is an advantage of generalized
computer audit packages?
• Question 67 The individual with whom an auditor would be most
likely to discuss specific access controls within a client’s relational
database management system is the
• Question 68 Which of the following is not a technique to continuously
test controls within a computer system?
• Question 69 To obtain evidence that user identification and password
controls are functioning as designed, an auditor would most likely
• Question 70 When testing a computerized accounting system, which of
the following is not true of the test data approach?
• Question 71 Which of the following is not a major reason for
maintaining an audit trail for a computer system?
• Question 72 In building an electronic data interchange (EDI) system,
what process is used to determine which elements in the entity's
computer system correspond to the standard data elements?
• Question 73 Which of the following is not a major reason for
maintaining an audit trail for a computer system?
• Question 74 Auditing by testing the input and output of a computer
system instead of the computer program itself will
• Question 75 An auditor anticipates assessing control risk at a low level
in a computerized environment. Under these circumstances, on which of
the following controls would the auditor initially focus?

===============================================
ACC 544 Week 6 Quiz (Internal Controls)
ACC 544 Week 6 Quiz (Internal Controls)
• Question 1 Which of the following payroll control activities would
most effectively ensure that payment is made only for work performed?
• Question 2 Effective internal control over the payroll function would
include which of the following?
• Question 3 One of the auditor’s objectives in observing the actual
distribution of payroll checks is to determine that every name on the
payroll is that of a bona fide employee. The payroll observation is an
auditing procedure that is generally performed for which of the
following reasons?
• Question 4 A large retail enterprise has established a policy which
requires that the paymaster deliver all unclaimed payroll checks to the

internal auditing department at the end of each payroll distribution day.
This policy was most likely adopted in order to
• Question 5 In the audit of which of the following types of profit-
oriented enterprises would the auditor be most likely to place special
emphasis on testing the controls over proper classification of payroll
transactions?
• Question 6 The reliance placed on substantive tests in relation to the
reliance placed on internal control varies in a relationship that is
ordinarily
• Question 7 An auditor uses the assessed level of the risk of material
misstatement to
• Question 8 The purpose of segregating the duties of hiring personnel
and distributing payroll checks is to separate the
• Question 9 An audit client failed to maintain copies of its procedures
manuals and organizational flowcharts. What should the auditor do in an
audit of financial statements?
• Question 10 As a result of tests of controls, an auditor assesses control
risk too high. This incorrect assessment most likely occurred because
• Question 11 To provide assurance that each voucher is submitted and
paid only once, an auditor most likely would examine a sample of paid
vouchers and determine whether each voucher is
• Question 12 A client erroneously recorded a large purchase twice.
Which of the following controls would be most likely to detect this error
in a timely and efficient manner?
• Question 13 A client’s materials-purchasing cycle begins with
requisitions from user departments and ends with the receipt of materials
and the recognition of a liability. An auditor’s primary objective in
reviewing this cycle is to

• Question 14 The company being audited has an internal auditor that is
both competent and objective. The independent auditor wants to assign
tasks for the internal auditor to perform. Under these circumstances, the
independent auditor may
• Question 15 An effective control that protects against the preparation
of improper or inaccurate disbursements would be to require that all
checks be
• Question 16 During a financial statement audit an internal auditor may
provide direct assistance to the independent CPA in performing
• Question 17 When assessing internal auditors' objectivity, an
independent auditor should
• Question 18 Which of the following factors most likely would assist
an independent auditor in assessing the objectivity of the internal
auditor?
• Question 19 Which of the following is the most effective control to
detect vouchers that were prepared for the payment of goods that were
not received?
• Question 20 Miller Retailing, Inc. maintains a staff of three full-time
internal auditors who report directly to the controller. In planning to use
the internal auditors to provide assistance in performing the audit, the
independent auditor most likely will
• Question 21 The accounts payable department receives the purchase
order form to accomplish all of the following except
• Question 22 The independent auditor should acquire an understanding
of the internal audit function as it relates to the independent auditor’s
consideration of internal control because
• Question 23 For effective internal control purposes, the vouchers
payable department generally should

• Question 24 For which of the following judgments may an independent
auditor share responsibility with an entity’s internal auditor who is
assessed to be both competent and objective?
• Question 25 If the independent auditor decides that the work
performed by internal auditors may have a bearing on the independent
auditor’s own procedures, the independent auditor should consider the
objectivity of the internal auditors. One method of judging objectivity is
to
• Question 26 While obtaining an understanding of a client’s risk
assessment policies, an auditor ordinarily considers how management
• Question 27 Management’s attitude toward aggressive financial
reporting and its emphasis on meeting projected profit goals most likely
would significantly influence an entity’s control environment when
internal control?
• Question 29 Which of the following factors is most relevant when an
auditor considers the client’s organizational structure in the context of
control risk?
• Question 30 Which of the following analytical procedures most likely
would be used during the risk assessment stage of an audit?
• Question 31 Analytical procedures performed during the risk
assessment phase of an audit should focus on
• Question 32 Which of the following is an analytical procedure that an
auditor most likely would perform when performing the risk assessment
of an audit?
• Question 33 Which of the following most likely would cause an
auditor to consider whether a client’s financial statements contain
material misstatements?

• Question 34 To help plan the nature, timing, and extent of substantive
auditing procedures, preliminary analytical procedures should focus on
• Question 35 When a customer fails to include a remittance advice with
a payment, it is a common practice for the person opening the mail to
prepare one. Consequently, mail should be opened by which of the
following four company employees?
• Question 36 Which one of the following would the auditor consider to
be an incompatible operation if the cashier receives remittances from the
mailroom?
• Question 37 An auditor’s tests of controls for completeness for the
revenue cycle usually include determining whether
• Question 38 An auditor reviews a client’s accounting policies and
procedures when considering which of the following planning matters?
• Question 39 An entity with a large volume of customer remittances by
mail could most likely reduce the risk of employee misappropriation of
cash by using
• Question 40 An auditor has identified the controller's review of the
bank reconciliation as a control to test. In connection with this test, the
auditor interviews the controller to understand the specific data reviewed
on the reconciliation. In addition, the auditor verifies that the bank
reconciliation is properly prepared by the accountant and reviewed by
the controller as evidenced by their respective sign-offs. Which of the
following types of audit procedures do these actions illustrate?
• Question 41 Which of the following best represents a key control for
ensuring sales are properly authorized when assessing control risks for
sales?
• Question 42 An auditor who uses a transaction cycle approach to
assessing control risk most likely would test control activities related to
transactions involving the sale of goods to customers with the

• Question 43 To determine whether internal control relative to the
revenue cycle of a wholesaling entity is operating effectively in
minimizing the failure to prepare sales invoices, an auditor most likely
would select a sample of transactions from the population represented by
the
• Question 44 For effective internal control, the billing function should
be performed by the
• Question 45 At which point in an ordinary sales transaction of a
wholesaling business would a lack of specific authorization be of least
concern to the auditor in the conduct of an audit?
• Question 46 Which of the following fraudulent activities most likely
could be perpetrated due to the lack of effective internal control in the
revenue cycle?
• Question 47 To verify that all sales transactions for which shipment
has occurred have been recorded, a test of transactions should be
completed on a representative sample drawn from
• Question 48 After testing a client’s internal control activities, an
auditor discovers a number of significant deficiencies in the operation of
a client’s internal control. Under these circumstances the auditor most
likely would
• Question 49 Which of the following is true regarding significant
deficiencies?
• Question 50 During the audit the independent auditor identified the
existence of a significant deficiency in the client’s internal control and
communicated this finding in writing to the client’s management and to
those charged with governance. The auditor should
an auditor’s communication on internal control related matters noted in
an audit?

• Question 52 Which of the following would not typically be a control
relied upon during an audit?
• Question 53 The auditor would be least likely to be concerned about
internal control as it relates to
• Question 54 When preparing a record of a client’s internal control, the
independent auditor sometimes uses a flowchart, which can best be
described as a
• Question 55 One important reason why a CPA, during the course of an
audit engagement, prepares internal control flowcharts is to
• Question 56 In an audit of financial statements, an auditor’s primary
consideration regarding a control is whether the control
• Question 57 Effective internal control requires organizational
independence of departments. Organizational independence would be
impaired in which of the following situations?
• Question 58 An auditor would most likely be concerned with controls
that provide reasonable assurance about the
• Question 59 Proper segregation of functional responsibilities calls for
separation of the
• Question 60 Which of the following sets of duties would ordinarily be
considered basically incompatible in terms of good internal control?
• Question 61 A primary objective of procedures performed to obtain an
understanding of internal control is to provide an auditor with
• Question 62 Which of the following factors is most likely to affect the
extent of the documentation of the auditor’s understanding of a client’s
system of internal controls?
• Question 63 Walk-throughs provide evidence that helps auditors to

• Question 64 An auditor’s tests of controls over the issuance of raw
materials to production would most likely include
• Question 65 Well functioning internal control for the
inventory/production functions would provide that finished goods are to
be accepted for stock only after presentation of a completed production
order and a(n)
• Question 66 Tests of controls are performed in order to determine
whether
• Question 67 Which of the following would be least likely to be
included in an auditor’s tests of controls?
• Question 68 Which of the following is not a step in an auditor’s
decision to conclude that controls operate effectively?
• Question 69 When an auditor plans to rely on controls that have
changed since they were last tested, which of the following courses of
action would be most appropriate?
• Question 70 Which of the following is a step in an auditor’s decision to
assess the risk of material misstatement at a low level by relying on
controls?
• Question 71 A client maintains a large data center where access is
limited to authorized employees. How may an auditor best determine
the effectiveness of this control activity?
• Question 72 Which of the following is an inherent limitation of internal
controls?
• Question 73 An independent auditor has concluded that the client’s
records, procedures, and representation can be relied upon based on tests
made during the year when internal control was found to be effective.
The auditor should test the records, procedures, and representations
again at year-end if

• Question 74 When considering internal control to determine whether
the necessary procedures are designed and operating effectively, an
auditor must
• Question 75 Which of the following is required documentation in an
audit in accordance with generally accepted auditing standards?
===============================================

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