An Auditor's Primary Consideration in Evaluating Controls Is Whether Specific

question 342

Multiple Choice

An auditor's primary consideration in evaluating controls is whether specific controls:

• A) Affect financial statement assertions.
• B) Can be classified into one of the five internal control components.
• C) Improve the efficiency of the client's operations.
• D) Reduce detection risk to a sufficiently low level.

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Definitions:

Installment Notes

Financial instruments that require the issuer to make payments to the holder over a specified period, usually including both principal and interest.

Accrued Interest

The interest on a loan or bond that has accumulated since the principal investment, or last payment, and has yet to be paid.

Principal

The original sum of money borrowed in a loan or the initial amount of investment, excluding any interest or dividends.

Issue Price

The price at which new shares, bonds, or other securities are offered to the public or institutional investors for the first time.