To Obtain an Understanding of an Entity's Control Environment, an Auditor

question 69

Multiple Choice

To obtain an understanding of an entity's control environment, an auditor should concentrate on the substance of management's policies and procedures rather than their form because

• A) management may establish appropriate policies and procedures but not act on them.
• B) the board of directors may not be aware of management's attitude toward the control environment.
• C) the auditor may believe that the policies and procedures are inappropriate for that particular entity.
• D) the policies and procedures may be so weak that no reliance is contemplated by the auditor.

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Definitions:

Routine Request

A standard or regular petition for information, services, or action within established practices or procedures.

Prospective Employer

An employer with whom a job seeker is considering a future working relationship, often during the application or interview stage.

Verify Your Response

The act of checking the accuracy or truthfulness of your statements or information provided.

Presume Agreement

A persuasion technique assuming the audience agrees with the statement being made to encourage actual agreement.