Question 1
An act of two or more employees to steal assets and cover their theft by misstating the accounting records would be referred to as
◦ collusion.
◦ a material weakness.
◦ a control deficiency.
◦ a significant deficiency.
Question 2
An auditor should consider two key issues when obtaining an understanding of a client's internal controls. These issues are
◦ the effectiveness and efficiency of the controls.
◦ the frequency and effectiveness of the controls.
◦ the design and operating effectiveness of the controls.
◦ the implementation and operating effectiveness of the controls.