18 – 29 . The CPA firm of Carson & Boggs LLP is performing an internal control audit in accordance with PCAOB Standard No . 5 . The partner in charge of the engagement has asked you to explain the process of determining which controls to test . Describe the process , presenting each of the links in this process and a short summary of how the auditors approach each of them .
18 – 34 . Simulation
Bill Jensen , a staff member of Zhan & Co ., CPAs , has given you the following list of what he refers to as “ internal control deficiencies ” for the Zabling Co . audit and has asked you to review each point and make certain that you agree that each is an internal control deficiency . For each of the following items , reply A ( Agree ) or D ( Disagree ) indicating whether the item represents an internal control deficiency .
18 – 35 . Match the following definitions ( or partial definitions ) to the appropriate term . Each term may be used once or not at all .
18 – 36 . Your working papers for an integrated audit being performed under PCAOB Standard No . 5 include the narrative description below of the cash receipts and billing portions of internal control of Slingsdale Building Supplies , Inc . Slingsdale is a single-store retailer that sells a variety of tools , garden supplies , lumber , small appliances , and electrical fixtures to the public , although about half of Slingsdale ’ s sales are to construction contractors on account . Slingsdale employs 12 salaried sales associates , a credit manager , three full-time clerical workers , and several part-time cash register clerks and assistant bookkeepers . The full-time clerical workers perform such tasks as cash receipts , billing , and accounting and are adequately bonded . They are