The Five Step Process in the Audit of ICFR Includes

question 42

Multiple Choice

The five step process in the audit of ICFR includes:

• A)form an opinion on the safeguarding of the entity's assets.
• B)identify controls to test using a top-down, risk-based approach.
• C)form an opinion on the fairness of the presentation of the financial statements.
• D)plan the audit of the financial statements.

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Definitions:

Fiscal Year

A fiscal year refers to a 12-month period utilized by businesses and governments for the purposes of financial reporting and budgeting, and it doesn't always align with the calendar year.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value of the asset over time.

Balance Sheet

A financial report that offers a glimpse into a company's financial health at a given moment, breaking down the company's assets, debts, and owner's equity.

Equipment

Durable goods used in the operation of a business, not intended for sale, often contributing to the production of other goods or services.