After Obtaining an Understanding of an Entity's Internal Control System

question 39

Multiple Choice

After obtaining an understanding of an entity's internal control system, an auditor may assess control risk at a high level for some account balances because he or she:

• A)identifies internal controls that are likely to prevent material misstatements.
• B)performs tests of controls to reduce detection risk to an acceptable level.
• C)determines that the pertinent internal control components are not well documented.
• D)believes the internal controls are unlikely to be operating effectively.

---

Definitions:

Urban Areas

Designated regions characterized by higher population density and vast human features in comparison to areas surrounding them.

Homestead Act

Legislation passed in 1862 in the United States that granted 160 acres of public land to settlers for a small fee, provided they improve the land by building a dwelling and cultivating crops.

Founding Father

A member of the group of leaders who established the foundation of a nation, state, or political platform, often referred to in the context of the United States.

Collective Violence

Acts of violence committed by groups of individuals, ranging from spontaneous acts of public violence to organized acts by larger groups against others.