I.
II.
III.
IV.
I.
II.
III.
IV.
I.
II.
III.
IV.
I.
II.
III.
IV.
I.
II.
III.
IV.
Test. Variant 1
1. Which of the above is a control environment function?
governance function
controlling function
monitoring function
accounting function
2. Evidence regarding the control environment is usually obtained through a mixture of … and …,
although inspection of key internal documents (e.g. codes of conduct and organization charts) is
possible.
Analytical procedures, reconciliation
Observation, confirmation
Enquiry, observation
Monitoring, authorisation
3. According to ISA 315, which of the following is NOT a control activity?
Performance reviews
Physical controls
Organizational structure
Segregation of duties
4. Which of the above is the foundation for the other components of internal control?
Risk assessment
Control environment
Information system
Control activities
5. Which element of control environment is described below?
There should be open, transparent and equitable disciplinary procedures, such that employees can
be confident they will not be treated unfairly by the company in the event that an action triggers
its disciplinary process.
Communication and enforcement of integrity and ethical values
HR policies and practices
Assignment of authority and responsibility
Commitment to competence
Test. Variant 2
1.Which of the above is a control environment function?
I.
management function
II.
organizational function
III.
communication function
IV.
operational function
2. Business operations, types of investments, capital structure and financing, and ownership
structures are areas that are considered when obtaining an understanding of:
I.
Objectives and strategies.
II.
Accounting policies.
III.
The nature of the entity.
IV.
Measurement and review of financial performance.
3. Which of the above is an approach used by directors:
I.
approach to taking business risk
II.
attitudes and actions toward reporting
III.
attitudes toward information processing and accounting and functions personnel
IV.
approach to avoid business and financial risks.
4. Example of which element of control environment is described below?
A company has a strong anti-bribery and corruption policies when tendering for a contract, (and
has formal employee notification and checking practices in this regard), so less risk of noncompliance with relevant laws and regulations.
I.
Commitment to competence
II.
Communication and enforcement of integrity and ethical values
III.
Assignment of authority and responsibility
IV.
Organizational structure
4. The standards given in ‘Understanding the Entity and Its Environment and Assessing the Risks
of Material Misstatement’ (ISA 315) emphasizes:
I.
Obtaining an understanding of business risks and significant risks.
II.
Procedures for sampling audit tests.
III.
Obtaining an understanding of control risk.
IV.
Reports to federal regulators.