When Communicating Internal Control-Related Matters Noted in an Audit of a Nonpublic

question 42

Multiple Choice

When communicating internal control-related matters noted in an audit of a nonpublic company,an auditor's report issued on significant deficiencies should indicate that

• A) Errors or fraud may occur and not be detected because there are inherent limitations in any internal control system.
• B) The issuance of an unqualified opinion on the financial statements may depend on corrective follow-up action.
• C) The deficiencies noted were not detected within a timely period by employees in the normal course of performing their assigned functions.
• D) The purpose of the audit was to report on the financial statements and not to provide assurance on internal control.

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Definitions:

Junior

A term typically used to describe a third-year student in a four-year educational institution or someone with intermediate level experience in a job role.

Senior

Refers to an individual of advanced age or to a person holding a high and often authoritative position, especially in a business or academic setting.

Mean Age

The average age of the individuals in a given population or sample.

Registered Voters

Individuals who have officially enrolled on an electoral roll, making them eligible to vote in elections.