Reference no: EM132959400

Problem 1. Which of the following is a correct statement in relation to internal controls?

I. Internal controls are process designed, implemented and maintained by those charged with governance, management, and other personnel

II. Internal controls provide absolute assurance about the achievement of the entity's objectives on financial reporting, operations, and compliance.

III. Internal controls can be implemented using information technology.

A. I and III only

B. II only

C. II and III only

D. I, II and III

Problem 2. Which of the following statements is/are correct?

I. The auditor can eliminate substantive tests on significant account balances and classes of transactions for an entity that has exceptionally strong internal control

II. There is a direct relationship between an entity's objectives and the controls it implements to provide reasonable assurance about their achievement.

III. Effective controls can reduce the cost of external audit.

A. I and III only

B. II only

C. II and III only

D. I, II and III

Problem 3. Internal controls may be classified as?

I. Manual, automated or IT-dependent controls

II. Preventive, detective or corrective controls.

a. I only

b. II only

c. Both I and II

d. Neither I nor II