Audit

CHAPTER 10

Multiple-Choice Questions

|1. |Which of the following parties is responsible for establishing an entity’s internal controls? |

|easy |a. Management. |

|a |c. Auditors. |

| |b. Management and auditors. |

| |d. Committee of Sponsoring Organizations. |

| | |

|2. |For an internal audit function to be effective, it is essential that the internal audit staff |

|easy |a. be independent of the operating departments. |

|d |b. be independent of the accounting department. |

| |c. report directly to a high level of authority within the organization such as the audit committee. |

| |d. achieve all of the above. |

| | |

|3. |Management is often unwilling to implement an ideal system of internal controls because |

|easy |a. control failures are infrequent....