Understanding Components of Internal Control and Assessing the Level of Control

question 41

Multiple Choice

Understanding components of internal control and assessing the level of control risk are primarily used by the auditor to:

• A) determine the nature, timing and extent of substantive tests for financial statement assertions.
• B) modify the initial assessments of inherent risk and preliminary judgements about materiality levels.
• C) ascertain whether the opportunities to allow any person to both perpetrate and conceal irregularities are minimised.
• D) determine whether procedures and records concerning the safeguarding of assets are reliable.

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Definitions:

ATP-Producing

Pertaining to the process of generating adenosine triphosphate (ATP), the primary energy carrier in biological systems, mainly occurring in mitochondria.

Mitochondria

Organelles in eukaryotic cells that produce energy through cellular respiration, often referred to as the powerhouses of the cell.

FSH and LH

Follicle-stimulating hormone (FSH) and luteinizing hormone (LH) are important hormones in the regulation of the reproductive processes, including gamete production and hormonal control.

Synthetic Steroid Testosterone

A man-made version of the naturally occurring male hormone testosterone, used in medical treatments and sometimes illicitly to enhance athletic performance.