For Internal Controls That Are Relevant to the Audit,the Auditor

question 64

Multiple Choice

For internal controls that are relevant to the audit,the auditor should

• A)understand incentives of the company to misstate the financial statements
• B)identify the relevant financial statement accounts with the greatest potential for misstatements
• C)understand the design of the controls and the implementation of the controls
• D)design audit procedures to determine that the accounts are fairly presented according to the applicable financial reporting framework

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Definitions:

Trojan Horse

Program that claims to do one thing but in reality does something else, usually something malicious.

Network Firewall

A security system that monitors and controls incoming and outgoing network traffic based on predetermined security rules.

Wireless Intranet

An internal network that uses wireless technology to enable employees to access information and applications without the need for wired connections.