1. Which of the following is the least likely to represent a material weakness in internal control for Flynt Corporation?
A. Flynt Corporation’s computer systems were not working properly for two days; consequently, employees needed to do all reconciliations manually
B. For the current year, the auditor found a material misstatement in Flynt’s sales recognition that was undetected by the internal controls
C. Flynt’s audit committee is deemed to be ineffective
2. For the purpose of determining proper cutoff for inventory, the auditor will select a sample from which of the following for a few days before and after year-end?
|A. Materials requisitions|
|B. Production schedules|
|C. Receiving documents|
|D. Purchase orders|
3. Which of the following conditions or events most likely would cause an auditor to have substantial doubt about an entity’s ability to continue as a going concern?
|A. Significant related party transactions are pervasive|
|B. Usual trade credit from suppliers is denied|
|C. Arrearages in preferred stock dividends are paid|
|D. Restrictions on the disposal of principal assets are present
4. Generally, loss contingencies that are judged to be remote:
|5. Which of the following is the best audit procedure for the discovery of damaged merchandise in a client’s ending inventory?
|6. Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?
|7. An auditor performing an audit of internal control over financial reporting would be required to: