An Auditor Has Gained a Detailed Understanding of the Client's

question 16

Multiple Choice

An auditor has gained a detailed understanding of the client's system of internal controls and has conducted extensive tests of those controls. She later assesscontrol risk as low. What is she planning to perform?

• A) a combined audit strategy
• B) an audit of financial controls
• C) a substantive audit strategy
• D) a modified audit strategy

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Definitions:

Withdrawal

The act of removing oneself or stopping participation in an activity, agreement, or investment.

Actual Authority

The specific powers that an agent is given by a principal to carry out tasks on their behalf.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Winding-Up Stage

The process of settling the affairs of a company, involving the liquidation of assets and distribution of proceeds to creditors and shareholders, as part of the company's dissolution.