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Hello - I need assistant with this problem please:

When completing a financial statement audit, the auditors areconcerned with which category of internal control?

Controls over the reliability of financial reporting

Controls related to the efficiency and effectiveness ofoperations

Controls related to the company's compliance with applicablelaws and regulations

All of the above

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Nelly StrackeLv2
2 Jan 2019

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Refer to the Columbia Sportswear Annual Report in Appendix A.You will need to find and then read the following reports:

• Management’s Report on the Consolidated Financial Statements(Item 8)
• Report of Independent Registered Public Accounting Firm onConsolidated Financial Statements (Item 8)
• Management’s Report on Internal Control Over Financial Reporting(Item 9A)
• Report of Independent Registered Public Accounting Firm onInternal Control over Financial Reporting (Item 9A)

Requirements

1. Who is responsible for the information in the annual report? Whois responsible for recommending the independent accountants to theboard of directors?
2. Who were the independent auditors? Under what standards did theyconduct their audit? What was their opinion of the auditedfinancial statements?
3. Who is responsible for establishing and maintaining adequateinternal control over financial reporting? Is the effectiveness ofthe internal controls ever reviewed? Do you think that internalcontrol procedures are necessary? Why?
4. Do the auditors have any responsibility with respect to theinternal controls? What was the auditor’s opinion regarding themanagement assessment of internal con- trol effectiveness?

NOTE: Go beyond the textbook and search for articles on TheSarbanes Oxley (Section 404). Include what you’ve learned from yourresearch in your response to the above questions.

14. What is the purpose of using analytical reviews during the planning stage of an audit?

MULTIPLE CHOICE

a. To test controls

b. to insure duties are segregated.

c. to identify unusual items for further investigation.

d. to insure the audit evidence supports the auditor’s conclusions regarding the financial statements.

33. Which of the following is not considered a limitation of internal control?

MULTIPLE CHOICE

a. Misunderstanding instructions.

b. Not having an internal audit function.

c. Mistakes of judgment.

d. Carelessness, distraction and/or fatigue.

35. Which of the following is correct concerning evidence provided by specialists on audits?

MULTIPLE CHOICE

a. The use of a specialist is most likely to be appropriate when the auditor's independence is questioned.

b. The auditor must obtain an understanding of the methods used by the specialist to determine whether the findings are suitable to serve as corroborating evidence.

c. The specialist must be independent in fact and appearance.

d. A specialist should not be used to determine the market valuation of inventory.

51. Auditors are primarily concerned with internal controls that relate to:

MULTIPLE CHOICE

a. Financial statement assertions made by management.

b. Compliance with laws and regulations.

c. Generally accepted auditing standards.

d. Balance sheet accounts.

Colorado Springs Company (CSC) is a wholesaler with fiscal year ended December 31 of previous year. Since it is publicly-traded, it undergoes external audit. The most recent audit was completed in February of this year. As part of the audit of the financial statements, the auditors tested the effectiveness of management’s assessment of internal control over financial reporting. The auditor found out that existing internal controls were inadequate. Specifically, CSC’s accounting system for sales, cash receipts, accounts receivables, and accounts payable had material weakness. The audit revealed that there were:

Poor accounting system of recording keeping

Late deposits of cash receipts

Excessive aged and high accounts receivable balances

Disregard for early payments for discounts on invoices

Late payments of accounts payable (sometimes due to lack of cash)

Lax appropriate segregation of duties

Relaxed rules on accounting principles’ application

Unqualified supervisor and management

Inadequate control on supervisor and management overrides

Lax oversight by external board of directors

1) For each finding above, indicate internal control principle that CSC violated.

2) For each finding above, provide an appropriate recommendation for CSC to correct the weakness.

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