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Name: ______________________________________ Auditing and Assurance Principles

Permit No.: ______________ Date: _____________

Final Examination

Select and encircle the best answer for each of 5. On the basis of the audit evidence gathered and
the following questions. evaluated, an auditor decides to increase the
assessed level of control risk from that originally
1. Broadly defined, the subject matter of any audit planned. To achieve an overall audit risk level that
consists of is substantially the same as the planned audit risk
a)Financial statements level, the auditor would
b) Economic data
c) Assertions a) Decrease substantive testing
d) Operating data b) Increase inherent risk
c) Decrease detection risk
d) Increase materiality levels
2. The third standard of field work states that
sufficient competent evidential matter may in part 6. An effective internal control
be obtained through the following methods a) Cannot be circumvented by management
except b) Can reduce the cost of an external audit
a) Inspection c) Can prevent collusion among employees
b) Observation d) Eliminates risks and potential loss to the
c) Confirmation organization
d) Reconciliation
7. In auditing through a computer, the test data
method is used by auditors to test the
3. If an auditor believes that material error or a) Accuracy of input data
fraud exist, the auditor should b) Validity of the output
a) Consider the implications and discuss the c) Procedures contained within the program
matter with appropriate levels of management d) Normalcy of distribution of test data
b) Make the investigation necessary to determine
whether errors or fraud have in fact occurred 8. An auditor's working papers will generally be
c) Request that management investigate whether least likely to include documentation showing how
errors or fraud have in fact occurred the
d) Consider whether errors or fraud where the a) Client's schedules were prepared
result of employee's failure to comply with specific b) Engagement had been planned
controls c) Client's system of internal control had been
reviewed and evaluated
d) Unusual matters were resolved
4. Which of the following is not normally
performed in the pre-planning or pre-engagement 9. Which of the following sampling methods
phase? would be most appropriate in performing tests of
a) Deciding whether to accept or reject an audit controls over authorization of cash disbursements
engagement a) Attributes
b) Inquiring from predecessor auditor b) Variables
c) Preparing an engagement letter c) Ratio
d) Making a preliminary estimate of materiality d) Stratified

10. Analytical procedures used in the overall

review stage of an audit generally include 16. In reviewing the audit work performed, the
a) Considering unusual or unexpected account engagement partner
balances that were not previously identified a) Must review all audit documentation
b) Performing test of transactions to corroborate b) Need not review all audit documentation, but
management's financial statement assertions may do so
c) Gathering evidence concerning account c) Need not review all audit documentation
balances that have not changed from the prior d) Must ask the staff performing the audit work to
year sign the audit report
d) Re-testing control procedures that appeared to
be ineffective during the assessment of control 17. The independent auditor lends credibility to
risk client’s financial statements by
a) Maintaining a clear-cut distinction between
11. Results of the financial statement audit are management’s representations and the auditor’s
communicated to users through representation
a) Financial statement b) Testifying under oath about client’s financial
b) Written management assertion statements
c) Audit report c) Stating in the auditor’s management letter that
d) None of the above the examination was made in accordance with
generally accepted auditing standards
12. What is the primary difference between d) Attaching an auditor’s opinion to the client’s
financial reporting risk and audit risk? financial statements
a) The application of accounting principles
b) Responsibilities of the respective parties 18. The most difficult type of misstatement to
involved detect is fraud based on
c) Demands of users of financial statements a) The over-recording of transactions
d) Risks of being sued by third parties b) The non-recording of transactions
c) Recorded transactions in subsidiaries
13. Relationship between control risk and d) Related party receivables
detection risk is ordinarily
a) Parallel 19. Assuming a recurring audit, in which of the
b) Inverse following situations would the auditor be unlikely
c) Direct to send a new engagement letter to the client?
d) Equal a) A recent change in partner and/or staff
involved in the audit engagement
14. A representation letter issued by a client b) A change in the terms of engagement
a) Is essential for the preparation of the audit c) A recent change of client management
program d) A significant change in the nature or size of the
b) Is a substitute for testing client's business
c) Does not reduce the auditor's responsibility
d) Reduces the auditor's responsibility only to the 20. When an auditor expresses an adverse opinion
extent that it is relied upon he/she should disclose the substantive reasons for
such an opinion in an explanatory paragraph
15. The recruitment of senior management for an a) Within the notes to the financial statements
assurance client, such as those in a position to b) Preceding the opinion paragraph
affect the subject of the assurance engagement c) Following the opinion paragraph
may least likely create d) Preceding the introductory paragraph
a) Self-interest threat
b) Advocacy threat 21. Tolerable error means
c) Intimidation threat a) An error that arises from an isolated event that
d) Familiarity threat has not recurred other than on specifically
identifiable occasions and is therefore not
representative of errors in the population
b) An error that the auditor expects to be present c) Original source documents
in the population d) Externally generated documents
c) The maximum error in a population that the
auditor is willing to accept 27. For good internal control, the purchasing
d) The possibility that the auditor's conclusion, department should not be responsible for
based on a sample may be different from the a) Authorizing the acquisition of goods
conclusion reached if the entire population were b) Finding the lowest cost vendor
subjected to the same audit procedure c) Reviewing the vendors catalog descriptions and
prices for standardized items
22. Examples of events or conditions, which d) Designing the purchase order form
individually or collectively, may cast significant
doubt about the going concern assumption 28. Involves tracing a few transactions through the
include the following except accounting system
a) Net liability or net current liability position a) Test of controls
b) Change from credit to cash-on-delivery b) Walk-through test
transactions with suppliers c) Analytical procedures
c) Labor difficulties or shortages of important d) Substantive procedures
d) Compliance with capital or other statutory 29. This exists, when other information, not
requirements related to matters appearing in the financial
statements, is incorrectly stated or presented
23. Which of the following procedures is not a) Material inconsistency
included in a review engagement on a nonpublic b) Material misstatement
entity c) Material misstatement of fact
a) Inquiries of management d) Material error affecting the other information
b) Inquiries regarding events subsequent to the
balance sheet date 30. Who appoints the members of the Board of
c) Any procedures designed to identify Accountancy
relationships among data that appear to be a) The chairman of BOA
unusual b) The president of the Philippines
d) A study and evaluation of internal control c) The chairman of the PRC
structure d) The president of PICPA

24. In planning the audit engagement, the auditor 31. An auditor is required to obtain an
should consider each of the following except understanding of the entity's business, including
a) The kind of opinion that will likely be given business cycles and reasons for business
b) Matters relating to the entity’s business and the fluctuations. What is the audit purpose most
industry in which it operates directly served by obtaining this understanding?
c) The entity’s accounting policies and procedures a) To enable the auditor to accurately identify
d) Anticipated levels of control risk and materiality significant deficiencies in internal control
b) To assist the auditor in accurately interpreting
25. What assurance is provided by the practitioner information obtained during an audit
in an agreed-upon procedures engagement? c) To allow the auditor to more accurately
a) Reasonable perform tests of controls
b) Absolute d) To decide whether it will be necessary to
c) Moderate perform analytical procedures
d) No assurance
32. Which of the following is not true about the
26. To test for unsupported entries in the journal, report release date?
the direction of audit testing should be from the a) It is defined as the date after which existing
a) Journal entries documentation must not be deleted, and additions
b) Ledger entries to the documentation file must be documented as
such interim date rather than as of the balance sheet
b) It is often the date on which the report is date. The auditor should be aware that this
delivered to the client practice
c) It is the date on which the auditor grants the a) Eliminates the use of certain statistical sampling
client permission to use the report methods that would otherwise be available
d) It is used to define the beginning of the b) Presumes that the auditor will reperform the
retention period tests of the balance sheet date
c) Should be especially considered when there are
33. An auditor should not issue a report on rapidly changing economic conditions
a) Quarterly financial information d) Potentially increases the risk that errors that
b) Internal control exist at the balance sheet date will not be detected
c) Management performance
d) The achievability of forecasts 39. Close family include the following, except
a) Parent
34. Which of the following procedures would an b) Sibling
auditor most likely perform to obtain evidence c) Non-dependent child
about the occurrence of subsequent events? d) Spouse
a) Confirming a sample of material accounts
receivable established after year-end 40. A computer-assisted audit technique that is
b) Comparing the financial statements being most likely to be effective in a continuous auditing
reported on with those of the prior period environment is
c) Investigating personnel changes in the a) Parallel simulation
accounting department occurring after year-end b) Controlled reprocessing
d) Inquiring as to whether any unusual c) Embedded audit modules
adjustments were made after year-end d) Transaction tripping

35. To which of the following matters would 41. Which of the following is not prohibited by
materiality limits not apply when obtaining written the Code of Professional Ethics for CPAs?
client representations? a) Advertising and solicitation of clients
a) Violations of state labor regulations b) Payment of commissions to obtain a client
b) Disclosure of line-of-credit arrangements c) Receiving a contingent fee on a tax case before
c) Information about related party transactions the Bureau of Internal Revenue
d) Instances of fraud involving management d) Offering employment to a staff member of
another CPA without first informing the CPA
36. Who ultimately determines the scope of the
audit? 42. The management's assessment of the entity's
a) The auditor ability to continue as a going concern covers a
b) The client period of
c) Both a and b a) Not longer than 12 months from balance sheet
d) Neither a nor b date
b) At least 12 months from the balance sheet date
37. Financial statements prepared in accordance c) Not longer than 12 months from the date of
with a financial reporting framework designed to audit report
meet the financial information needs of specific d) At least 12 months from the date of audit
users are referred to as report
a) Special purpose financial statements
b) Special purpose framework 43. To obtain evidential matter about control risk,
c) General purpose financial statements an auditor selects tests from a variety of
d) Specific purpose financial statements techniques including
a) Inquiry
38. An auditor plans to apply substantive tests to b) Analytical procedures
the details of asset and liability accounts as of an c) Calculation
d) Confirmation b) To submit evidence in the course of legal
44. The need for independent audits of financial c) Acquiring information in the course performing
statements can be attributed to all of the following professional services and use that information for
conditions except personal advantages
a) Remoteness d) When consent to disclose information is given
b) Consequence by the client
c) Complexity of subject matter
d) Validity 49. The auditor should perform the following risk
assessment procedures to obtain an understanding
45. After issuing a report an auditor includes that of the entity and its environment, including its
an auditing procedure considered necessary at the internal control, except
time of the examination was omitted from the a) Inquiries of management and others within the
examination. The auditor should first entity
a) Undertake to apply the omitted procedure or b) Reperformance
alternative procedures that would provide a c) Analytical procedures
satisfactory basis for the auditor's opinion d) Observation and inspection
b) Assess the importance of the omitted
procedure to the auditor's ability to support the 50. The auditor should determine overall
opinion expressed on the financial statements responses to address the risks of material
taken as a whole misstatement at the financial statement level. Such
c) Notify the audit committee or the board of responses most likely include
directors that the auditor's opinion can no longer a) Assigning less experienced staff
be relied upon b) Performing predictable further audit
d) Review the results of other procedures that procedures
were applied to compensate for the one omitted c) Performing substantive procedures at an
or to make its omission less important interim date instead of at period end
d) Emphasizing to the audit team the need to
46. This quality control element requires a CPA maintain professional skepticism in gathering and
firm to establish policies and procedures to evaluating audit evidence
provide it with reasonable assurance that
engagements are performed in accordance with 51. The need for assurance services arises for all
professional standards and regulatory and legal of the following reason except
requirements, and that the firm or the engagement a) Potential bias in providing information
partner issue reports that are appropriate in the b) Closeness between a user and the organization
circumstances c) Complexity of the processing systems
a) Ethical requirements d) Remoteness between a user and the
b) Engagement performance organization
c) Monitoring
d) Human resources 52. Which one of the following is not a key
attribute needed to perform assurance?
47. Communication with a predecessor auditor is a) Subject matter knowledge
initiated by b) Independence
a) Management c) Established criteria or standards
b) The successor auditor d) Accounting skills
c) The audit committee of the board of directors
d) The chair of the board of directors 53. Which one of the following is not part of the
attest process?
48. In which of the following may confidential a) Providing the accuracy of the books and
information not be disclosed? records
a) To comply with the quality review of a member b) Gathering evidence about assertions
body or professional body c) Evaluating evidence against objective criteria
d) Communicating the conclusions reached a) Created by the profession
b) Within the client’s systems and procedures
54. Users of the audit report can reasonably c) In the work environment
expect the audited financial statements to be d) Created within the business community
a) Complete and contain many of the important
financial disclosures 60. If certain forms are not consecutively
b) Presented fairly according to the substance of numbered
GAAP a) Systematic sampling may be appropriate
c) Free from all errors b) Selection of a random sample probably is not
d) All of the above possible
c) Stratified sampling should be used
55. Which of the following services is the broadest d) Random number tables cannot be used
and most inclusive
a) Audit
b) Attestation
c) Assurance 61. A cash shortage may be concealed by
d) Compliance transporting funds from one location to another
or by converting negotiable assets to cash.
56. One reason why an auditor makes an analytical Because of this, which of the following is vital?
review of the client’s operations is to identify a) Simultaneous confirmations
a) Improper separation of accounting and other b) Simultaneous bank reconciliations
financial duties c) Simultaneous verification
b) Weakness of a material nature in the system of d) Simultaneous surprise cash count
internal accounting control
c) Unusual transactions 62. Which of the following is most likely to
d) Non-compliance with prescribed control indicate a significant deficiency relating to a
procedures client's anti-fraud programs?
a) A broad scope of internal audit activities
57. Analytical procedures used in planning an b) A "whistle-blower" program that encourages
audit should focus on identifying anonymous submissions
a) Material weaknesses in the internal control c) Audit committee passivity when conducting
structure oversight functions
b) The predictability of financial data from d) Lack of performance of criminal background
individual transactions investigations for likely customers
c) The various assertions that are embodied in the
financial statements 63. Which of the following is not an attestation
d) Areas that may represent specific risk relevant standard?
to audit a) Sufficient evidence shall be obtained to provide
a reasonable basis for the conclusion that is
58. An integrated test facility (ITF) would be expressed in the report
appropriate when the auditor needs to b) The report shall identify the subject matter on
a) Trace a complex logic path through an the assertion being reported on and state the
application system character of the engagement
b) Verify processing accuracy concurrently with c) The work shall be adequately planned and
processing assistants, if any, shall be properly supervised
c) Monitor transactions in an application system d) A sufficient understanding of internal control
continuously shall be obtained to plan the engagement
d) Verify load module integrity for production
programs 64. Proper segregation of functional
responsibilities calls for separation of the
59. The rotation of senior accounting personnel functions of
can be regarded as a safeguard a) Authorization, execution, and payment
b) Authorization, recording, and custody b) Competence
c) Custody, execution, and reporting c) Independence
d) Authorization, payment, and recording d) Complex body of knowledge

65. Control risk should be assessed in terms of 70. Which of the following would an auditor most
a) Specific controls likely use in determining the auditor's preliminary
b) Types of potential fraud judgment about materiality?
c) Financial statement assertions a) The anticipated sample size of the planned
d) Control environment factors substantive tests
b) The entity's annualized interim financial
66. Which of the following is not a step in an statements
auditor's assessment of control risk? c) The results of the internal control questionnaire
a) Evaluate the effectiveness of internal control d) The contents of the management
with tests of controls representation letter
b) Obtain an understanding of the entity's
information system and control environment 71. Which of the following conditions identified
c) Perform tests of details of transactions to detect during fieldwork of an audit is most likely to affect
material misstatements in the financial statements the auditor's assessment of the risk of
d) Consider whether controls can have a pervasive misstatement due to fraud?
effect on financial statement assertions a) Checks for significant amounts outstanding at
67. Which of the following procedures would an b) Computer generated documents
auditor ordinarily perform first in evaluating c) Missing documents
management's accounting estimates for d) Year-end adjusting journal entries.
a) Develop independent expectations of 72. An auditor ordinarily uses a working trial
management's estimates balance resembling the financial statements
b) Consider the appropriateness of the key factors without footnotes, but containing columns for
or assumptions used in preparing the estimates a) Cash flow increases and decreases
c) Test the calculations used by management in b) Audit objectives and assertions
developing the estimates c) Reclassifications and adjustments
d) Obtain an understanding of how management d) Reconciliations and tick marks
developed its estimates
68. An entity's income statements were misstated 73. The risk that an auditor will conclude, based
due to the recording of journal entries that on substantive tests, that a material misstatement
involved debits and credits to an unusual does not exist in an account balance when in fact
combination of expense and revenue accounts. such misstatement does exist is referred to as
The auditor most likely could have detected this a) Detection risk
fraudulent financial reporting by b) Sampling risk
a) Tracing a sample of journal entries to the c) Non-sampling risk
general ledger d) Inherent risk
b) Evaluating the effectiveness of internal control
c) Investigating the reconciliations between 74. The usefulness of the standard bank
controlling accounts and subsidiary records confirmation request may be limited because the
d) Performing analytical procedures designed to bank employee who completes the form may
disclose differences from expectations a) Be unaware of all the financial relationships that
the bank has with the client
69. Which of the following is most likely to be b) Not believe that the bank is obligated to verify
unique to the audit work of CPAs as compared to confidential information to a third party
work performed by practitioners of other c) Sign and return the form without inspecting the
professions? accuracy of the client's bank reconciliation
a) Due professional care d) Not have access to the client's cutoff bank
statement member of the board of directors.

79. Which is least likely to be a question asked of

75. A material weakness is a significant deficiency client personnel during a walk-through in an audit
(or combination of significant deficiencies) that of the internal control of an issuer (public)
results in a reasonable possibility that a company?
misstatement of at least 'what amount will not be a) What do you do when you find an error'?
prevented or detected? b) Who is most likely to commit fraud among
a) An amount greater than zero your coworkers?
b) An amount greater than zero, but at least c) What kind of errors have you found?
inconsequential d) Have you ever been asked to override the
c) An amount greater than inconsequential process or controls?
d) A material amount
80. An auditor who uses the work of a specialist
may refer to and identify the specialist ill the
76. The existence of audit risk is recognized by the auditor's report if the
statement in the auditor's standard report that the a) Specialist is also considered to be a related
auditor party.
a) Obtains reasonable assurance about whether b) Auditor indicates a division of responsibility
the financial statements are free of material related to the work of the specialist.
misstatement. c) Specialist's work provides the auditor greater
b) Assesses the accounting principles used and assurance of reliability.
also evaluates the overall financial statement d) Auditor expresses an "except for" qualified
presentation. opinion or an adverse opinion related to the work
c) Realizes some matters either individually or in of the specialist.
the aggregate, are important while other matters
are not important.
d) Is responsible for expressing an opinion on the 81. Which of the following statements concerning
financial statements, which arc the responsibility evidential matter is correct?
of management. a) Appropriate evidence supporting management's
assertions should be convincing rather than
77. Which of the following services would be merely persuasive.
most likely to be structured as an attest b) Effective internal control contributes little to
engagement? the reliability of the evidence created within the
a) Advocating a client's position in tax matter. entity.
b) A consulting engagement to develop a new c) The cost of obtaining evidence is not an
database system for the revenue cycle. important consideration to an auditor in deciding
c) An engagement to issue a report addressing an what evidence should be obtained.
entity's compliance with requirements of specified d) A client's accounting data cannot be considered
laws. sufficient audit evidence to support the financial
d) The compilation of a client's forecast statements.
82. Confirmations of accounts receivable address
78. Which of the following is ordinarily which assertion most directly?
considered to be a fraud risk factor? a) Completeness
a) The company's financial statements include a b) Existence
number of last minute material adjustments. c) Valuation
b) Management regularly informs investors of d) Classification
forecast information.
c) The company has experienced increasing 83. When performing a review of an issuer
earnings over the previous five years. company, which is least likely to be included in the
d) The company's president is included as a CPA's inquires of management members with
responsibility for financial and accounting b) Agreed-upon procedures
matters? c) Compilation
a) Subsequent events d) Review
b) Significant journal entries and other
adjustments 88. Which of the following should an auditor
c) Communications with related parties obtain from the predecessor auditor prior to
d) Unusual or complex situations affecting the accepting an audit engagement?
financial statements a) Analysis of balance sheet accounts
b) Analysis of income statement accounts
84. The adverse effects of events causing an c) All matters of continuing accounting
auditor to believe there is substantial doubt about significance
an entity's ability to continue as a going concern d) Facts that might bear on the integrity of
would most likely be mitigated by evidence management
relating to the
a) Ability to expand operations into new product 89. Which is least likely to be a response when an
lines in the future. auditor has obtained evidence indicating a risk of
b) Feasibility of plans to purchase leased material misstatement in the area of inventory?
equipment at Jess than market value. a) Request inventory counts at the end of each
c) Marketability of assets that management plans month.
to sell. b) Discuss questions of inventory valuation with
d) Committed arrangements to convert preferred any other auditors involved with the audit.
stock to long-term debt. c) Make oral inquiries of major suppliers in
addition to written confirmations.
85. One reason that an auditor only obtains d) Perform inventory observations on an
reasonable, and not absolute, assurance that unannounced basis.
financial statements are free from material
misstatement is 90. The independent auditor selects several
a) Comprehensive basis reporting transactions in each functional area and traces
b) Employee collusion them through the entire system, paying special
c) Material misstatements attention to evidence about whether or not the
d) Professional skepticism controls are in operation. This is an example of
86. When an auditor concludes there is substantial a(n)
doubt about a continuing audit client's ability to a) Application test
continue as a going concern for a reasonable b) Test of controls
period of time, the auditor's responsibility is to c) Substantive test
a) Issue a qualified or adverse opinion, depending d) Test of a function
upon materiality, due to the possible effects on the
financial statements. 91. Accounting control procedures within
b) Consider the adequacy of disclosure about the computer processing may leave no visible
client's possible inability to continue as a going evidence indicating that the procedures were
concern. performed. In such instances, the auditor should
c) Report to the client's audit committee that test these controls by
management's accounting estimates may need to a) Making corroborative inquiries.
be adjusted. b) Observing the separation of duties of
d) Reissue the prior year's auditors report and add personnel.
an explanatory paragraph that specifically refers to c) Reviewing transactions submitted for
"substantial doubt" and "going concern." processing and comparing them to related output.
d) Reviewing the run manual.
87. The accountant who is not independent may
perform which of the following types of 92. If information is for management's use only,
engagements? which of the following forms of CPA association
a) Audit with financial information is most likely to result
in no report being issued? c) Specialized audit programs
a) An agreed-upon procedures engagement d) Analytical procedures
b) An audit
c) A compilation 97. Which of the following statements best
d) A review describes the ethical standard of the profession
pertaining to advertising and solicitation?
93. In obtaining an understanding of a a) All forms of advertising and solicitation are
manufacturing entity's internal control over prohibited.
inventory balances, an auditor most likely would b) There are no prohibitions regarding the manner
a) Review the entity's descriptions of inventory in which CPAs may solicit new business.
policies and procedures. c) A CPA may advertise in any manner that is not
b) Perform test counts of inventory during the false, misleading, or deceptive.
entity's physical count. d) A CPA may only solicit new clients through
c) Analyze inventory turnover statistics-to identify mass mailings.
slow-moving and obsolete items.
d) Analyze monthly production reports to identify 98. A note to the financial statements of a bank
variances and unusual transactions. indicates that all of the records relating to its
business operations are stored on magnetic disks;
and that there are no emergency back-up systems
94. When auditing merchandise inventory at year- or duplicate disks stored since the bank and their
end, the auditor performs a purchase cutoff test to auditors consider the occurrence of a catastrophe
obtain evidence that to be remote. Based upon this, one would expect
a) All goods owned at year-end are included in the the auditor's report to express
inventory balance. a) An adverse opinion
b) All goods purchased before year-end are b) An "except for" opinion
received before the physical inventory count. c) An unqualified opinion
c) No goods held on consignment for customers d) A qualified opinion
are included in the inventory balance.
d) No goods observed during the physical count 99. Which of the following is not typically
are pledged or sold. performed when accountants are performing a
review of the financial statements of a nonissuer?
95. A company has changed its method of a) Analytical procedures applied to financial data
inventory valuation from an unacceptable one to b) Inquiries about significant subsequent events
one in conformity with generally accepted c) Inquiries of the client's attorney about legal
accounting principles. The auditor's report on the matters
financial statements of the year of the change d) Obtaining an understanding of the accounting
should include principles followed by the client's industry
a) No reference to consistency.
b) A reference to a prior period adjustment in the
opinion paragraph. 100. Which of the following is least likely to be a
c) An explanatory paragraph explaining the restricted use report?
change. a) A report on financial statements prepared
d) A justification for making the change and the following a comprehensive basis of accounting
impact of the change on reported net income. other than generally accepted accounting
96. An abnormal fluctuation in gross profit that b) A report on internal control significant
might suggest the need for extended audit deficiencies noted in an audit.
procedures for sales and inventories would most c) A required communication with the audit
likely be identified in the planning phase of the committee.
audit by the use of d) A report on compliance with aspects of
a) Tests of transactions and balances contractual agreements.
b) A preliminary review of internal control