How Can an Auditor Use Inquiry to Gain a Better

question 70

Multiple Choice

How can an auditor use inquiry to gain a better understanding of internal controls?

• A)By interviewing key employees to gain further insight into the internal control environment.
• B)By observing the safeguarding of assets by checking locked doors and safes.
• C)By tracing a transaction from the boundary of the organization through to the final reporting.
• D)By documenting thoroughly the internal control through the use of narratives.

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Definitions:

Saturated Solution

A solution containing the maximum concentration of a solute dissolved in a solvent at a given temperature and pressure.

Molarity

A measure of concentration expressing the number of moles of a solute per liter of solution.

Diluting

The process of reducing the concentration of a solute in a solution, usually by adding more solvent.

Molarity

An indicator of solute density within a solution, measured in moles per liter of the solution.