When analyzing exceptions, the auditor should keep in mind that
A) all exceptions must be reported to management.
B) they should determine the breakdown in the internal controls that allowed the exceptions to occur.
C) the nature of an exception and its causes have no effect on the qualitative evaluation of the system.
D) exceptions do not need to be analyzed if it is too costly.

Question

Quizplus · Accepted Answer

When analyzing exceptions, the auditor should determine the breakdown in the internal controls that allowed the exceptions to occur. This will help the auditor identify the root cause of the exception and provide recommendations for improving the control environment. Option A is incorrect as not all exceptions may need to be reported to management, depending on their significance. Option C is incorrect as the nature and causes of the exception do have an effect on the qualitative evaluation of the system. Option D is incorrect as exceptions should be analyzed regardless of cost.

When Analyzing Exceptions, the Auditor Should Keep in Mind That