When an Audit Client Uses a Service Organization to Manage

question 127

Multiple Choice

When an audit client uses a service organization to manage their investment activity,

• A) the auditor can always rely on the internal controls of the service organization.
• B) the auditor must state in their audit opinion that the client uses a service organization.
• C) the auditor can rely on the internal controls of the service organization if the service organization's auditor issues a report on their internal control.
• D) the auditor must rely on the service organization to determine the fair level 1, 2, and 3 estimates.

---

Definitions:

Societal Problem

A challenge or issue that affects a significant number of people within a society, requiring collective action for resolution.

Innovation Process

A systematic series of steps that includes the generation, development, and implementation of new ideas or products.

Idea Generation

The method of inventing, formulating, and sharing novel ideas or answers.

Operational And Work Methods

Refers to the standardized procedures and practices that are used to carry out day-to-day activities in an organization efficiently.