In an Audit of Financial Statement in Accordance with Generally

question 94

Multiple Choice

In an audit of financial statement in accordance with generally accepted auditing standards, an auditor is required to:

• A)Document the auditor's understanding of the client company's internal controls
• B)Search for weaknesses in the operation of the client company's internal controls
• C)Perform tests of controls to evaluate the effectiveness of the client company's internal controls
• D)Determine whether controls are appropriately operating to prevent or detect material misstatements

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Definitions:

Board of Governors

The leading body of the Federal Reserve System, overseeing the Federal Reserve Banks and setting monetary policy in the United States.

Appointed

Selected or designated for a position or duty by an authority, rather than by election or competition.

President

The elected head of a republican state or organization, responsible for executing the laws and leading the executive branch.

Federal Reserve System

The central banking system of the United States, responsible for setting monetary policy and regulating banks.