In Planning the Audit, the Auditor Obtains a Sufficient Understanding

question 466

Multiple Choice

In planning the audit, the auditor obtains a sufficient understanding of the existing internal control. Which one of the following is not among the auditor's primary objectives for obtaining such knowledge?

• A) Identify types of material misstatements.
• B) Consider the factors that affect the risk of material misstatement.
• C) Make constructive suggestions to the client for improvement.
• D) Design effective substantive tests.

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Definitions:

Documentation Procedures

The processes used for documenting a company's financial transactions, activities, and controls to ensure accuracy and reliability of financial records.

Documentation Procedures

The systematic process of organizing, managing, and maintaining records and documents for business operations.

Physical Controls

Security measures used to safeguard tangible assets from loss or theft, such as locks, alarms, and surveillance.

Independent Internal Verification

A process within companies where transactions and operations are reviewed by internal staff members who are not directly involved in the execution of these transactions, to ensure accuracy and compliance.