Describe the three broad objectives management has when designing effective internal control.(15 points) – Homeworkmade

DOWNLOAD: Describe the three broad objectives management has when designing effective internal control.(15 points) – Homeworkmade

1. Describe the three broad objectives management has when designing effective internal control.(15 points)

2. What is the relationship among the five components of internal control?

3. What is a walkthrough of internal controls?  What is it purpose?(5 points)

4. Distinguish among tests of details or balances, tests of controls, and substantive tests of transactions for the revenue cycle.  Explain how the tests of controls and substantive test of transaction affect the test of details of balances. (15 points)

5. Explain why you agree or disagree with the following statement:  In most audits, it is more important to test carefully the cutoff for sales than for cash receipts.  Describe how you perform each type of test, assuming documents are prenumbered. (5 points)

6. AU Section 325, provides guidance on evaluating the severity of control deficiencies and requires the auditor to communicate, in writing, to management and those charged with governance (e.g., the audit committee or its equivalent), significant deficiencies and material weaknesses identified in an audit.  Distinguish between controls deficiency, significant deficiency, and material weakness.  (15 points)