When Planning an Audit of Internal Controls Over Financial Reporting

question 24

Multiple Choice

When planning an audit of internal controls over financial reporting, the auditor needs a comprehensive knowledge of the company and its environment. This knowledge might include:

• A) preliminary judgments about the results of operations.
• B) assessments about the efficiency of operations.
• C) conclusions about the effectiveness of internal controls.
• D) an assessment of the effectiveness of the audit committee.
• E) legal or regulatory matters of which the company is aware.

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Definitions:

Bleeding Time

The duration taken for bleeding to stop, which is a basic test to assess platelet function or clotting ability.

Prothrombin Time

A blood test that measures how long it takes blood to clot.

Lymphedema

A condition characterized by swelling usually in the arms or legs, due to a blockage in the lymphatic system preventing lymph fluid from draining well.

Lymphangitis

An inflammation of the lymphatic channels that occurs as a result of infection, often resulting in red, painful streaks under the skin.