If the Auditor Identifies Deficiencies in the Controls Designed to Prevent

question 46

Multiple Choice

If the auditor identifies deficiencies in the controls designed to prevent or detect fraud in the audit of internal control over financial reporting,the auditor should

• A)conduct additional testing of the controls where the deficiency was found
• B)investigate these deficiencies in the financial statement audit
• C)gather evidence designed to identify the nature of the possible fraud
• D)consider the financial reporting process deficient and adjust the audit opinion accordingly

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Definitions:

Prevention Costs

Expenditures made to avoid defects in products or inefficiencies in services, part of quality control measures.

Value-Added

The enhancement a company gives its product or service before offering the product to customers, increasing the product's value.

Value-Added

The enhancement a company gives its product or service before offering the product to customers.

Non-Value-Added

Activities or processes that do not add value to a product or service from the customer's perspective, potentially leading to unnecessary costs.