Paul Is in the Process of Performing Procedures to Obtain

question 12

Multiple Choice

Paul is in the process of performing procedures to obtain the necessary understanding of the client's internal controls.As part of this process,Paul received from the client completed narratives,flowcharts,and internal control questionnaires.Paul can use this information from the client

• A)if the entity-level controls and tone at the top were found to be effective.
• B)if there has not been any significant change in the internal controls since the prior year.
• C)as long as any subsequent reliance on controls is adequately substantiated with testing.
• D)since it was prepared by management,which is unbiased.

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Definitions:

Cash Dividend

Dividend that is paid in cash.

Long-Term Debt

Financial obligations of a business or individual that are due more than one year in the future.

Equipment Trade

The act of exchanging equipment between parties, usually without the exchange of money.

Direct Approach

A communication strategy that involves conveying a message in a straightforward and clear manner, without circumvention.