The Primary Purpose of the Auditors' Study of Internal Control

question 35

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 substantive procedures.

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Definitions:

Public Disclosure

The act of making information or data known to the public, particularly by companies and governments, to ensure transparency and informed decision-making by stakeholders.

Beer Distributorship

A business that has the authorization to distribute beer from manufacturers to retailers, acting as an intermediary in the supply chain.

Ethical Decision

A decision-making process that involves evaluating and choosing among alternatives in a manner consistent with ethical principles.

Promoting Alcoholic Beverages

Marketing activities aimed at increasing awareness and sales of alcoholic drink products.