For an Auditor to Examine Management's Assertions About the Effectiveness

question 25

Essay

For an auditor to examine management's assertions about the effectiveness of internal control in an attestation engagement,three conditions are necessary.Briefly explain them.

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Definitions:

Random Number Intervals

A sequence or range of numbers generated in a way that each number has an equal chance of appearing, used in simulations and probability assessments.

Probability Distribution

A mathematical function outlining all potential values and their probabilities for a random variable within a specific range.

Monte Carlo Method

A computational technique that uses random sampling and statistical modeling to estimate mathematical functions and simulate the behavior of various physical and mathematical systems.