Principles and Practice of Auditing

What does internal control primarily aim to achieve?

• Reducing company profits
  
  

• Ensuring the reliability of financial reporting, compliance with laws, and safeguarding assets
  
  

• Increasing employee benefits

• Increasing operational complexity

Which of the following is NOT an objective of internal control?

• Preventing fraud and errors
  
  

• Ensuring company profits increase

• Ensuring compliance with laws and regulations

• Safeguarding assets

Which of the following is one of the objectives of internal control?

• Promoting operational efficiency

• Increasing the cost of operations
  
  

• Creating a complex process for reporting
  
  

• Reducing company transparency

Which of the following is an objective of internal check?

• Minimizing financial controls

• Preventing fraud
  
  

• Promoting business secrecy

• Reducing employee involvement in transactions

What is one of the primary objectives of internal control regarding operational activities?

• Reducing operational waste and redundancy
  
  

• Encouraging fraud

• Ensuring high employee turnover

• Complicating business procedures

Which of the following is NOT an objective of internal control?

• Supporting reliable financial reporting

• Preventing fraud and errors
  
  

• Increasing the complexity of internal processes

• Promoting ethical behavior

What should be compared to verify the accuracy of a cash purchase?

• Physical inventory with purchase orders

• Employee satisfaction surveys
  
  

• Customer feedback

• Financial statements and balance sheets

What type of documentation confirms the receipt of goods or services in a cash purchase transaction?

• Purchase order

• Goods receipt note

• Cash payment receipt
  
  

• Payment invoice

Who should verify the supplier's invoice for cash purchases?

• The sales department
  
  

• The accounts department

• The shipping department

• The human resources department

What is the purpose of an internal audit?

• To prepare financial statements

• To assess the effectiveness of internal controls and risk management
  
  

• To approve all purchase orders
  
  

• To set the organization’s financial goals