BT Ch-15&16

E Co has a large marketing department. In which of the following ways would this

department co-ordinate with E's accounting department?

• Decisions on the quantity of raw materials required

• Establishing credit terms for customers

• Calculating pay rises for staff

• Decisions on the selling price of the product

Which of the following is NOT a way in which an organisation's production department

would co-ordinate with its accounting department?

• Calculating charge out rates for services provided by the organisation

• Calculating the budgets for the number of units to be produced

• Estimation of the costs of the raw materials required for production

• Decisions on the quality of raw materials that the organisation can afford to use

Which of the following is a feature of services provided by an organisation?

• Permanence

• Innovation

• Variability

• Separability

HGF is a company that operates taxis within several cities in country U and has received a

number of complaints regarding the behaviour of its drivers towards passengers. One of

HGF's marketing executives has pointed out that even if the customer's journey is fast, cheap

and reliable, customers will still see the service offered by HGF as poor if the driver behaves

poorly.

What aspect of the nature of service provision is HGF's marketing executive referring to?

• Intangibility

• Perishability

• Variability

• Inseparability

The key purpose of internal auditing is to:

• detect errors and fraud

• evaluate the organisation's risk management processes and systems of control

• give confidence as to the truth and fairness of the financial statements

• express an internal opinion on the truth and fairness of the financial statements

Internal check is defined as:

1. 1. ensuring that no single task is executed from start to finish by only one person.

2. 2. providing reasonable assurance about the achievement of the organisation's

objectives.

Which of these options is/are correct?

• 1 only

• 2 only

• Both

• Neither

Internal auditors have an unavoidable.........................problem, as they report to those people

whose activities they are reporting on.

Which word correctly completes this sentence?

• Integrity

• Independence

• Loyalty

• problem, as they report to those people

It is considered to be best practice for the internal auditors of a large company to report

directly to:

• the board of directors

• the external auditors

• the shareholders

• the audit committee

Consider the following two statements:

There is greater flexibility in how internal audit work is done relative to external audit

1. 1. work, since external audit work is controlled by the law and audit standards.

2. 2. To practice as an internal auditor, the person must be a qualified accountant.

Which of these options is/are correct?

• 1 only

• 2 only

• Both

• Neither

The fact that managers are not aware of problems a company is facing, such as not knowing

that a major incident of fraud has recently taken place, would weaken which of the

following components of internal controls?

• Control environment

• The entity's risk assessment process

• Control activities

• The entity's process to monitor the system of internal control