[CPA CMA]

Which of the following events occurring in the year under audit would most likely indicate that internal controls utilized in previous years may be inadequate in the year under audit?

A.

The entity announced that the internal audit function would be eliminated after the balance sheet date.

B.

The audit committee chairperson unexpectedly resigned during the year under audit.

C.

The chief financial officer waived approvals on all checks to one vendor to expedite payment.

D.

The frequency of accounts payable check runs was changed from biweekly to weekly.

The correct answer is B on Roger CPA review, but it is C on NINJA MCQ.

Which answer is correct?

Master of Professional Accountancy (MPA) 12/17/2014

BEC 76 (10/3/14)
FAR 75 (10/24/14)
REG 83 (4/6/15)
AUD 75 (4/20/15)
Anticipated Licensure: August 2016

CMA part 1 passed (6/15/15)
CMA part 2 Passed (9/4/15)
Anticipated Licensure: August 2017

[TheGuyCPA]

It's strange I think my Becker had a similar issue where in the HW the same problem came up multiple times and sometimes it was B and sometimes it was C. Who has the answer??

FAR - 80
REG - 78
AUD - 88
BEC - 84

State of Illinois Licensed CPA as of September 2015

[TheGuyCPA]

FAR - 80
REG - 78
AUD - 88
BEC - 84

State of Illinois Licensed CPA as of September 2015

[Anonymous]

i think its C. That shows that internal controls are ineffective since they are not being followed by the CFO. B has nothing to do with internal controls.

[jschrei2]

I agree that C should be the correct answer. Approvals relate directly to internal control and waiving them is clearly a significant deficiency in internal control, if not a material weakness depending on the significance of the checks were approval was waived.

FAR- 88
REG- 88
AUD- 93
BEC-86

[Author]

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