Which of the Following Is Not a Reason That the Auditor

question 20

Multiple Choice

Which of the following is not a reason that the auditor must gain an understanding of the client's internal control system?

• A)Better understand the client,its risks,and how it manages those risks.
• B)Assess control risk and identify the types of financial statement misstatements that are most likely to occur.
• C)Plan direct tests of account balances to determine if misstatements have occurred.
• D)All are reasons why auditors must gain an understanding of the client's internal control system.

Understand the role of government agencies in protecting consumer rights and the specific functions of these agencies.

Understand the various elements of business activity and their interconnections.

Distinguish between tangible and intangible products.

Grasp the economic issues of supply and demand, including understanding limited resources.

---

Definitions:

Lateral Runout

A measurement of the deviation or wobble in a rotating component, such as a brake rotor or wheel, from its primary axis of rotation.

Eccentric Runout

Variation in the rotational path of a rotating part, causing uneven movement or vibration.

Backlash

The play or loose movement in mechanical components, particularly in gears, resulting from gaps between parts.

Gear Teeth

The individual protrusions on the circumference of a gear that engage with those on another gear to transmit torque and motion.