When obtaining an understanding of an entity’s internal control, an auditor should concentrate on the substance of controls rather than their form because: Select one: a. Management may establish appropriate controls but not enforce compliance with them. b. The controls may be operating effectively but may not be documented. c. The controls may be so inappropriate that no reliance is contemplated by the auditor. d. Management may implement controls whose costs exceed their benefits.
When obtaining an understanding of an entity’s internal control, an auditor should concentrate on the substance of controls rather than their form because: Select one: a. Management may establish appropriate controls but not enforce compliance with them. b. The controls may be operating effectively but may not be documented. c. The controls may be so inappropriate that no reliance is contemplated by the auditor. d. Management may implement controls whose costs exceed their benefits.
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter7: Planning The Audit: Identifying, And Responding To The Risk Of Material Misstatement
Section: Chapter Questions
Problem 21MCQ
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Question
When obtaining an understanding of an entity’s internal control, an auditor should concentrate on the substance of
controls rather than their form because:
Select one:
controls rather than their form because:
Select one:
a.
Management may establish appropriate controls but not enforce compliance with them.
b.
The controls may be operating effectively but may not be documented.
c.
The controls may be so inappropriate that no reliance is contemplated by the auditor.
d.
Management may implement controls whose costs exceed their benefits.
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