Question 4 To what does the following relate: Before a purchase of inventory can be made, it has to be authorized and supported by all relevant supporting documentation. 1. Monitoring of controls 2. Validity of transactions 3. Inherent limitations- cost vs benefit 4. Inherent limitations – human error, time constraints Question 5 To what does the following relate: Although the barcoding system in the warehouse is outdated and ineffective, the company cannot see the benefit in upgrading the system based on the high cost of the system. 1. Control environment 2. Inherent limitations – cost vs benefit 3. Validity of transactions 4. Control activities – independent checks and reconciliations Question 6 One of the six areas that an auditor needs to consider when obtaining an understanding of the entity is 1. Skills and competence of the audit team 2. Communication with the previous auditors 3. The entity’s internal control 4. Detection risk
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Question 4
To what does the following relate: Before a purchase of inventory can be made, it has to be authorized and supported by all relevant supporting documentation.
| 1. |
Monitoring of controls |
|
| 2. |
Validity of transactions |
|
| 3. |
Inherent limitations- cost vs benefit |
|
| 4. |
Inherent limitations – human error, time constraints |
Question 5
To what does the following relate: Although the barcoding system in the warehouse is outdated and ineffective, the company cannot see the benefit in upgrading the system based on the high cost of the system.
| 1. |
Control environment |
|
| 2. |
Inherent limitations – cost vs benefit |
|
| 3. |
Validity of transactions |
|
| 4. |
Control activities – independent checks and reconciliations |
Question 6
One of the six areas that an auditor needs to consider when obtaining an understanding of the entity is
| 1. |
Skills and competence of the audit team |
|
| 2. |
Communication with the previous auditors |
|
| 3. |
The entity’s internal control |
|
| 4. |
Detection risk |
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