Auditors Are Required to Consider a Client's Internal Control

question 75

Essay

Auditors are required to consider a client's internal control.
a.Describe the two purposes of the auditors' consideration of a client's internal control.
b.Even the best internal control has certain limitations.List three of those limitations.

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Definitions:

Pure Competition

A market structure characterized by a large number of sellers offering identical products, where no single seller can influence market prices.

Substitutes

Products or services that can serve as replacements for each other, fulfilling the same need or desire.

Market Segments

Groups of potential customers with similar needs, wants, and characteristics that a company targets with its products or services.

Deep Discounts

Significant reductions in price offered to consumers, often to clear inventory or boost sales temporarily.