ASA 315 States That the Auditor Shall Obtain an Understanding

question 92

Multiple Choice

ASA 315 states that the auditor shall obtain an understanding of internal control ________ to the audit.

• A) relative
• B) realistic
• C) relevant
• D) required

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Definitions:

Operating Segments

Components of a business that engage in business activities earning revenues and incurring expenses, whose operating results are regularly reviewed by the company's decision maker.

Revenues

The total amount of income generated by the sale of goods or services related to a company's primary operations before any costs or expenses are deducted.

Operating Segments

Operating segments refer to components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Identifying Factors

Elements or characteristics that can be used to recognize, classify, or differentiate between different subjects or objects.