Once an Understanding of the Client's Internal Control Is Obtained

question 7

Multiple Choice

Once an understanding of the client's internal control is obtained that is sufficient for audit planning, then the auditor must first assess:

• A) the level of control risk supported by the understanding obtained.
• B) whether a lower level of control risk could be supported.
• C) whether the financial statements are auditable.
• D) the level of control risk.

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Definitions:

External Locus

A belief that outcomes in one's life are controlled by external forces rather than by one's own actions.

Information Filtering

The process of screening, selecting, and presenting information selectively, often to reduce information overload or to emphasize certain aspects.

Persuasive Communication

The practice of using messages designed to influence or change the attitudes, beliefs, or behaviors of others.

Polycentric

Having multiple centers of power or influence, often used in the context of international business to describe a strategy that treats each market as unique.