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:

Federal Antitrust Case

Legal proceedings brought under U.S. federal antitrust laws, such as the Sherman Act or Clayton Act, which address practices affecting competitive conditions in interstate commerce.

Standing

The legal right to initiate a lawsuit, predicated on the party's stake in the outcome of the dispute being sufficiently direct and personal.

Potential Plaintiff

An individual or entity that has the standing and reason to consider initiating a lawsuit but has not yet filed a claim.

Antitrust Thinkers

Experts or intellectuals who focus on the analysis, critique, and reform of competition laws designed to prevent anticompetitive practices and promote market fairness.