When Documenting an Entity's Internal Control, the Independent Auditor Sometimes

question 41

Multiple Choice

When documenting an entity's internal control, the independent auditor sometimes uses a systems flowchart, which can best be described as a:

• A)pictorial presentation of the flow of instructions in an entity's internal computer system.
• B)diagram which clearly indicates an organization's internal reporting structure.
• C)graphic illustration of the flow of operations which is used to replace the auditor's internal control questionnaire.
• D)symbolic representation that represents the flow of documents and the processing steps among departments in the entity.

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Definitions:

Total Assets

The sum of all assets owned by a business, including current, fixed, and intangible assets, representing the total resources a company has at its disposal.

Total Liabilities

Comprises all the obligations a company owes, including loans, accounts payable, mortgages, deferred revenues, bond issues, warranties, and accrued expenses.

Total Equity

The total of all ownership interest in a company, calculated as total assets minus total liabilities.