When Obtaining an Understanding of Internal Control Relevant to Planning

question 51

Multiple Choice

When obtaining an understanding of internal control relevant to planning of a financial statement audit,the auditor should obtain adequate knowledge about the ________.

• A)Design of controls.
• B)Controls related to audit engagement assessment.
• C)Operating effectiveness of all controls.
• D)Safeguards over realization transactions.

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Definitions:

Prior Period Adjustments

Corrections of errors in financial statements of previous periods or adjustments for changes in accounting policies.

Net Losses

The amount by which a company's expenses exceed its revenues over a specific period, indicating a financial loss.