To Understand the Relevant Internal Controls of the Company,the Auditor

question 85

Multiple Choice

To understand the relevant internal controls of the company,the auditor should understand the following areas of the company:

• A)the management environment
• B)the risk assessment process
• C)the information system including the business processes relevant for financial reporting
• D)how the company communicates internal control roles and responsibilities
• E)how the company has controlled risks arising from IT
• F)both A and B
• G)both B and C
• H)both C and D

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Definitions:

Planning

The process of creating and maintaining a plan, which involves setting objectives, determining strategies to achieve those objectives, and organizing resources.

Controlling

In management, refers to the process of monitoring performance, comparing it with goals, and taking corrective action as needed.

Finance

The management of large amounts of money, especially by governments or large companies.