In an Audit of Financial Statements of a Private Company

question 73

Multiple Choice

In an audit of financial statements of a private company in accordance with generally accepted auditing standards,an auditor is required to

• A) Identify specific internal control activities relevant to management's financial statement assertions.
• B) Perform tests of controls to evaluate the effectiveness of the entity's accounting system.
• C) Determine whether procedures are suitably designed to prevent or detect material misstatements.
• D) Document the auditor's understanding of the entity's internal control.

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Definitions:

Linguistic Processes

Cognitive and neurological functions involved in the comprehension, production, and manipulation of language.

Lateralization

The tendency for some neural functions or cognitive processes to be more dominant in one hemisphere of the brain than the other.

Maturation

Unfolding of a natural sequence of physical and behavioral changes.

Learning Theory

An interdisciplinary field of study that describes how people absorb, process, and retain knowledge during learning.