Which control includes the procedures for system design, including the acquisition of software packages, should encourage active participation by the accounting department and internal auditors?
A. Organizations and operations control
B. System development control
C. Access control
D. Procedural control
Final approval should be obtained prior to placing a new system into operation is the activity that can be fall into which control?
A. Organizations and operations control
B. System development control
C. Access control
D. Procedural control
Which of the following is NOT the interrelated component of internal control?
A. Control environment
B. Risk assessment
C. Control activities
D. Planning control
A process designed to provide reasonable assurance about the achievement of the entity's objectives with regard to reliability of financial reporting, effectiveness and efficiency of operations is called:
A. External control
B. Internal auditing
C. Internal control
D. None of the above
The operating ratio is the combined ratio less than the ratio of investment income, to earned premiums.
A. True
B. False
The auditor should obtain a sufficient understanding by performing risk assessment procedures to:
A. evaluate the design of controls not relevant to audit of financial statement
B. determine whether design of controls have been implemented
C. Both A and B
D. Neither A nor B
The profitability of an insurance entity on a statutory basis is generally gauged by:
A. combined ratio and its operating ratio
B. single module ratio and its operating ratio
C. Net ratio
D. Gross ration and actual ratio
The combined ratio is the sum of it:
A. loss ratio
B. expense ratio
C. dividend ratio
D. All of the above
Which risk assessment procedures are used to obtain an understanding of the entity and its environment, including its internal control?
A. Inquiries of management
B. Analytical procedures
C. Observation
D. All of the above
Audit risk consists of:
A. Risk of material misstatement
B. detection of risk
C. Both A and B
D. Neither A nor B
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