When Considering Internal Control, an Auditor Should Be Aware of Reasonable

question 8

Short Answer

When considering internal control, an auditor should be aware of reasonable assurance, which recognizes that
A. Internal control may be ineffective due to mistakes in judgment and personal carelessness.
B. Adequate safeguards over access to assets and records should permit an entity to maintain proper accountability.
C. Establishing and maintaining internal control is an important responsibility of management.
D. The cost of an entity's internal control should not exceed the benefits expected to be derived.

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Definitions:

College Freshmen

Students in their first year of study at a college or university.

Random Sampling

A method in statistics for selecting a subset of individuals from a population in such a way that each individual has an equal chance of being selected.

Inductive Argument

Reasoning that moves from specific instances to a generalized conclusion, typically involving probability rather than certainty.

Premises

Statements or ideas that form the basis for a reasoned argument or the background against which an argument is formed.