To Obtain an Understanding of an Entity's Control Environment, an Auditor

question 69

Multiple Choice

To obtain an understanding of an entity's control environment, an auditor should concentrate on the substance of management's policies and procedures rather than their form because

• A) management may establish appropriate policies and procedures but not act on them.
• B) the board of directors may not be aware of management's attitude toward the control environment.
• C) the auditor may believe that the policies and procedures are inappropriate for that particular entity.
• D) the policies and procedures may be so weak that no reliance is contemplated by the auditor.

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Definitions:

Rivers

Large natural streams of water flowing in channels and emptying into larger bodies of water like lakes, seas, or other rivers.

Groundwater

The water found underground in the cracks and spaces in soil, sand, and rock.

Evaporation

The process by which liquid water transforms into vapor or gas, often driven by heat from the sun.

Precipitation

Any type of water, whether in liquid or solid state, descending from the sky to the earth's surface, encompassing phenomena like rain, snow, sleet, and hail.