Question

1.

1. In monetary-unit sampling, the values of the estimated likely maximum misstatements are referred to as the:

   		point estimates.
   		misstatement bounds.
   		precision intervals.
   		confidence intervals.

2.

Proper authorization for acquisition is useful for management as an internal control procedure, because it:

		ensures that goods/services are used efficiently by company employees.
		ensures that goods/services were purchased according to company policy.
		ensures that goods/services were purchased at the lowest possible price.
		ensures that goods/services were purchased from approved vendors.

3.

1. The acquisition and payment cycle is highly controlled and not well-structured in most companies.

   		True
   		False

Answer 1

1) Solution: misstatement bounds

Explanation: In sampling of monetary-unit, the values of the estimated likely maximum misstatements are termed to be misstatement bounds

2) Proper authorization for acquisition is essential because it:

Solution: ensures that goods/services were purchased according to company policy

Explanation: Proper authorization for acquisition is important as it ensures that products /services are for authorized motives as described by the company

3) Solution: False

Explanation: Most systems of internal control for payroll are highly structured as well as well controlled