An Auditor's Purpose for Performing Tests of Controls Is to Provide

question 90

Multiple Choice

An auditor's purpose for performing tests of controls is to provide reasonable assurance that:

• A)Controls are operating effectively.
• B)The risk that the auditor may unknowingly fail to modify the opinion on the financial statements is minimized.
• C)Transactions are executed in accordance with management's authorization and access to assets is limited by a segregation of functions.
• D)Transactions are recorded as necessary to permit the preparation of the financial statements in conformity with generally accepted accounting principles.

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Definitions:

Exact Interest

A method of calculating interest using a 365-day year or actual number of days in a loan's term, leading to a more precise interest calculation.

365-Day Year

A calendar year used for financial calculations, representing the actual number of days in most years.

Total Amount

The entire sum of money required for or received from a transaction.

Exact Simple Interest

Interest calculated exactly on the principal amount of a loan or investment, without compounding, over a specific period of time.