In Obtaining an Understanding of an Entity's Internal Control in a Financial

question 88

Multiple Choice

In obtaining an understanding of an entity's internal control in a financial statement audit of a nonpublic company,an auditor is not obligated to

• A) Determine whether the control activities have been placed in operation.
• B) Perform procedures to understand the design of the internal control policies.
• C) Document the understanding of the entity's internal control components.
• D) Search for significant deficiencies in the operation of the internal control.

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Definitions:

Exaggerations

Statements or claims not supported by facts, or the act of making something seem greater or more important than it actually is.

Salesperson

is an individual who sells goods or services, often working on behalf of a company, and is typically compensated via salary, commission, or a combination of both.

Waive Warranties

The act of relinquishing one's right to enforce certain guarantees about the quality or functionality of a product or service.

Implied And Express Warranties

Guarantees provided by a seller, with the former being understood though not explicitly stated and the latter clearly stipulated in a contract or agreement.