When the Auditor Is Obtaining an Understanding of a Service

question 17

Multiple Choice

When the auditor is obtaining an understanding of a service center's internal controls the auditor should:

• A) use the same criteria used to evaluate the client's internal controls.
• B) use different criteria because the service center resides outside the company.
• C) use the same criteria used to evaluate the client's internal controls but omit tests of transactions.
• D) use different criteria for the service center by including substantive tests of balances.

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Definitions:

Critical-Thinking Skill

A cognitive process that involves analyzing, evaluating, and synthesizing information to make reasoned judgments.

Listening Carefully

The act of attentively and actively engaging in the process of hearing and understanding spoken communication.

Organizing Information

The process of categorizing and structuring data or knowledge in a systematic way to enhance understanding and retrieval.

Guillain-Barré Syndrome

A rare disorder in which your body's immune system attacks your nerves, leading to muscle weakness and sometimes paralysis.