The Auditor's Primary Objective to Obtain an Understanding of Internal

question 23

Multiple Choice

The auditor's primary objective to obtain an understanding of internal control is that it must provide:

• A) a basis for constructive suggestions to the client for improving the accounting system.
• B) a method for safeguarding assets, checking the accuracy and reliability of accounting data, promoting operational efficiency and encouraging adherence to prescribed managerial policies.
• C) reasonable protection against client fraud and defalcations by client employees.
• D) an understanding that is sufficient for the auditor to plan the audit adequately.

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Definitions:

Risk Propensity

An individual's or organization's inclination or tendency to undertake actions that have uncertain outcomes, potentially involving loss or danger.

Anticipated Outcomes

Anticipated outcomes are the expected results or consequences of an action or decision.

Ranking Items

The process of organizing items or options in a sequential order based on their value, quality, importance, or other criteria.

Criterion

A standard or principle by which something is judged or decisions are made.