If an Auditor Has Determined That the Client Has an Excellent

question 16

Multiple Choice

If an auditor has determined that the client has an excellent internal control structure:

• A) the type of evidence required changes, but not the quantity.
• B) the auditor can conclude that there is reasonable assurance that the financial statements do not contain material misstatements.
• C) business risk is significantly reduced.
• D) the amount of audit evidence to be collected might be reduced relative to a situation where the control structure is not adequate.

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Definitions:

Prehensile Tail

A tail adapted for grasping or holding objects, found in some species of mammals, notably some monkeys.

Primate Suborder

A subdivision within the order Primates, which includes humans, apes, monkeys, and prosimians.

Prosimi

Commonly refers to a group of primates that includes lemurs, lorises, and tarsiers, often characterized by their more primitive features.

Homo Antecessor

Early humans living in about 1.2 mya to 800,000 years ago; some scientists believe that they should be classified with Homo heidelbergensis.