Performing Substantive Procedures Prior to Year-End,in the Absence of Specific

question 17

Multiple Choice

Performing substantive procedures prior to year-end,in the absence of specific effective controls,may be acceptable when:

• A)the likelihood of errors or fraud is high.
• B)the likelihood of errors or fraud is low.
• C)the auditor is able to conclude overall that the client's control environment is effective.
• D)Both a and c

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Definitions:

Reconciling Item

A financial entry that adjusts discrepancies between two accounts or statements to ensure they balance.

Technological Dependency

The reliance on technology and technological systems for the operational and strategic management of an organization.

Significant Influence

The power to participate in, but not control, the financial and operating policy decisions of another entity, which is often evidenced by owning a substantial portion of the voting rights.

Policy-making Processes

The steps involved in the development, decision-making, and implementation of policies within an organization or government.