Which of the Following Statements About Understanding Internal Control Is

question 7

Multiple Choice

Which of the following statements about understanding internal control is not true:

• A) The auditor uses the knowledge of the system of internal control to design further audit procedures to collect evidence.
• B) In the presence of a strong system of internal control, the auditor may choose to collect less evidence about transactions or balances.
• C) In the audit of a private company, it is necessary to express an opinion on the system of internal control over financial reporting.
• D) A thorough understanding of the system of internal control assists the auditor in identifying potential types of misstatements.
• E) A thorough understanding of the system of internal control assists the auditor in understanding the risk of material misstatements.

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Definitions:

Kinesthesis

The sense that detects body position and movement, helping individuals to coordinate voluntary movements.

Kinesthesis

The sense that detects body position and movement, contributing to our ability to coordinate movement and maintain balance.

Vestibular Sense

The sense related to the body's balance, posture, and the orientation of the body in space, largely managed by structures in the inner ear.

Top-Down Processing

A cognitive process that initiates with our thoughts, which flow down to lower-level functions, such as the senses; an approach wherein perception starts with the brain and is influenced by prior knowledge and expectations.