If a Particular Internal Control Is Not Followed by the Client

question 64

True/False

If a particular internal control is not followed by the client exactly 6% of the time, and the auditor's tests of that control find three control violations in a sample of 50, the sample is considered to be representative.

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Definitions:

Subsidiary Ledger

An accounting ledger containing detailed information for individual accounts, used to support the main ledger.

General Journal

A basic accounting record for entering all types of transactions before they are transferred to specific accounts in the general ledger.

Financial Statement

Documents that report on a company's financial performance and health, including the balance sheet, income statement, and cash flow statement.