Chapter 5 MC solutions Essay

Submitted By JingjingQ
Words: 2817
Pages: 12
Open Document
SOLUTIONS FOR MULTIPLE‑CHOICE QUESTIONS

5.33 a. Incorrect Effectiveness and efficiency is an objectives category, not a fundamental component. b. Correct “People” is the most important fundamental component. c. Incorrect Reliability of financial reporting is an objectives category, not a fundamental component. d. Incorrect Compliance with laws and regulations is an objectives category, not a fundamental component.

5.34 a. Incorrect Management letter suggestions are a secondary purpose. b. Correct These are the auditors’ responsibilities under GAAS. c. Incorrect This does not relate only to internal control. d. Incorrect Communication of control related matters is a secondary purpose.

5.35 a. Incorrect Larger sample sizes expand audit procedures. b. Incorrect Performing procedures at year‑end instead of at interim generally represents stricter application. c. Incorrect External evidence represents stricter application. d. Correct Performing procedures at an interim date is less effective.

5.36 a. Incorrect The issue of whether the company’s controls are processing data relates to the testing of operating effectiveness, not design effectiveness. b. Correct The testing of design effectiveness relates primarily to whether the control has been properly put in place to prevent or detect errors or fraud. In AS5, this is exactly the objective of testing the design effectiveness of a control as per paragraph 42 of the standard. c. Incorrect The issue of whether the company’s employees are processing the controls in accordance with procedures relates to the testing of operating effectiveness, not design effectiveness. d. Incorrect Letter b is the correct answer.

5.37 a. Incorrect When testing the operating effectiveness of a control, the auditor should use a combination of inquiry, observation, inspection, and reperformance. b. Incorrect When testing the operating effectiveness of a control, the auditor should use a combination of inquiry, observation, inspection, and reperformance. c. Correct This is a substantive test, not a test of a control’s operating effectiveness. d. Incorrect When testing the operating effectiveness of a control, the auditor should use a combination of inquiry, observation, inspection, and reperformance.

5.38 a. Incorrect This is a detective control. b. Incorrect This is a detective control. c. Correct This is a preventive control. d. Incorrect This is a detective control.

5.39 a. Incorrect The absolute amount of cost is irrelevant. Year‑end substantive work usually costs more than control evaluation work. b. Correct The cost savings of substantive testing exceeds the control evaluation cost. c. Incorrect Whether the cost of control work exceeds (or does not exceed) the cost of year‑end work is irrelevant. Efficiency relates to the cost that can be saved as a result of control evaluation work. d. Incorrect Efficiency is not achieved by reducing cost of substantive procedures to less than control work cost.

5.40 a. Incorrect The narrative is the documentation result of obtaining evidence. b. Correct The internal control questionnaire is a device for collecting evidence in the form of answers to control questions. c. Incorrect A flowchart is the documentation result of obtaining evidence. d. Incorrect Only the internal control questionnaire aids in obtaining the evidence.

5.41 a. Incorrect Substantive procedures produce evidence about financial statement assertions. b. Incorrect Company control activities accomplish a company’s management objectives. c. Incorrect Analytical review is not accomplished with test of control activities. d. Correct Tests of controls produce the evidence about actual operation of company control activities.

5.42 a. Incorrect This describes an audit procedure. b. Correct This is one way to describe the purpose of a transaction-level control activity. c. Incorrect This is a definition of an accounting process or system. d. Incorrect
Show More

Related Documents: Chapter 5 MC solutions Essay

Managerial Economics Chapter 5 and 6 Homework Essay

Chapter 5 Question 6 Page 218 Q = Dresses per week L= Number of labor hours per week Q = L –L2/800 MCL=$20 P= $40= therefore MR=$40 Part A: A firm maximizes profit when it equates MRPL = (MR) *(MPL) = MCL MPL= dQ/dL =1 – L/400 Therefore (40)*(1-L/400) = 20. The solution is L = 200. In turn, Q = 200 – (2002/800). The solution is Q = 150. The firms profit is= PQ – (MC)L= ($40) (150) – ($20) (200) = $2,000 Part B Price increase to $50: Q = Dresses per week L= Number of labor hours…

Words 1315 - Pages 6

Externality and Jonathan Gruber Chapter Essay

Chapter 5 Externalities: Problems and Solutions Externalities: Problems and Solutions Chapter 5 5.1 Externality Theory 5.2 Private-Sector Solutions to Negative Externalities 5.3 Public-Sector Remedies for Externalities 5.4 Distinctions Between Price and Quantity Approaches to Addressing Externalities 5.5 Conclusion © 2007 Worth Publishers Public Finance and Public Policy, 2/e, Jonathan Gruber Chapter 5 Externalities: Problems and Solutions Externalities: Problems and Solutions © 2007 Worth…

Words 2681 - Pages 11

Assignment 4 1 and the Kinked Demand Curve Essay

Maria Van Gelder Jones International University Economic Theory and Application Assignment 4.1 Technical Questions: 1, 3 and 5 of Chapter 9 & 10 Chapter 9 1. The following graph: (not able to recreate, but in the text), shows a firm with a kinked demand curve a. What assumption lies behind the shape of this demand curve? The kinked demand curve assumes that other firms will follow price decreases and will not follow price increases. For instance, in an oligopoly model, based…

Words 966 - Pages 4

Accounting Changes And ERRAR Analysis: Accounting Change And Error Analysis

CHAPTER 22 ACCOUNTING CHANGES AND ERROR ANALYSIS TRUE-FALSe—Conceptual Answer No. Description F 1. Change in accounting estimate. T 2. Errors in financial statements. F 3. Adoption of a new principle. T 4. Retrospective application of accounting principle. F 5. Reporting cumulative effect of change in principle. T 6. Disclosure requirements for a change in principle. T 7. Indirect effect of an accounting change. T 8. Retrospective application impracticality. F 9. Reporting…

Words 9258 - Pages 38

Essay about Background Reading Reading Notes

CHAPTER 5: LIGATION Background Cloning Vectors Pgs 94 - 101 Once a gene or part of a gene has been amplified using PCR, the next step in cloning is to insert the DNA into a plasmid or cloning vector so that the fragment can be propagated. Gene is amplified  insert DNA into a cloning vector to be grown. a vector is defined as an organism that transmits an infectious agent from one host to another (Infectious disease definition) A vector is an agent (such as a bacteriophage or plasmid) that is…

Words 5385 - Pages 22

Essay about Fbmicro Sample Final Solutions

Principles of Microeconomics Solutions to Sample Final Examination Part A: Multiple Choice Questions 1. E 2. C - There is insufficient information to determine which choice she should make, but an optimal choice should include the opportunity cost of the $75,000 salary offer if the management position is the best alternative to her current position. 3. A - We must give up something in order to get more of another. Note that increasing opportunity costs tells us the shape of the curve, not why…

Words 1759 - Pages 8

Microeconomics: Supply and Demand and Quantity Essay

Economics 1000-C Chapter 1 Scarcity: the limited nature of society's resources Economics: the study of how people, firms, and society manages their resources Marginal Benefit: What you earn Marginal Cost: what you give up Sunk Cost: Spending $10,000 on x does not affect whether or not I do y because x was yesterday’s problem. What happens in the past is irrelevant Incentive: Something that induces a person to act. ie. The prospect of a reward or punishment. The point of taxes is to alter your…

Words 3946 - Pages 16

Essay on 18 Withgott 2ce Tif

Environment: Science Behind the Stories, 2e Cdn. Ed. (Withgott) Chapter 18 Managing Our Waste 18.1 Graph and Figure Interpretation Questions Figure 18.1 Discarded electronic waste can leach heavy metals including lead. The light-coloured bar shows the percentage of electronic devices leaching. The U.S. EPA's regulatory threshold for lead leachate is 5 mg/L. The graph shows the percentage of devices that exceed the threshold, as well as the average concentration of lead leachate from each waste…

Words 6100 - Pages 25

978 1 4020 5233 0 SolutionsManual Essay

SOLUTIONS TO ENDOF-CHAPTER PROBLEMS for Introduction to Planetary Science; The Geological Perspective by Gunter Faure and Teresa M. Mensing The Ohio State University Published by Springer, P.O. Box 17, 3300 AA Dordrecht, The Netherlands 2007 1 Chapter 1: The Urge to Explore 1. Select one of the several polar explorers and write a short report about him (2 pages doublespaced). Identify what aspect of planning and execution led to success or failure of the expedition: 1. Roald Amundsen 2. Robert…

Words 8352 - Pages 34

CHM 130 SP 15 SYLLABUS 1 Essay

https://angel.mohave.edu And Mastering Chemistry, available at http://www.pearsonmylabandmastering.com/northamerica/masteringchemistry/ Modality of Course 100% online with mandatory activities via MasteringChemistry® and Hands-On Labs (HOL) MasteringChemistry (MC) Course ID: CHM130SP15 Course Description: Transferable Course | Course Fee: $40; Three lecture; three lab. Prerequisite: Appropriate score on assessment test or successful completion of PCS 021, TRM 091 and TRE 089. Fundamental chemistry covers…

Words 2373 - Pages 10