The Primary Purpose of the Auditors' Study of Internal Control

question 67

Multiple Choice

The primary purpose of the auditors' study of internal control for a nonpublic entity is

• A) to provide constructive suggestions to the client for improving its internal control.
• B) to report on internal control as required by Auditing Standard No. 5.
• C) to identify and detect fraud and irregularities perpetrated by client personnel.
• D) to determine the nature, timing, and extent of further audit procedures.

---

Definitions:

Leader's Behavior

Actions exhibited by individuals in leadership positions, including how they interact with the group, make decisions, and inspire others.

Demands

The needs or desires that individuals or markets have, which can drive the production and supply of goods or services.

Constraints

Limitations or restrictions that affect decision-making or the execution of plans.

Lower-level Managers

Managers at the lower ranks of an organizational hierarchy, directly supervising non-managerial employees and handling day-to-day operations.