An auditor should consider two key issues when obtaining an understanding of a client's internal controls. These issues are
A) the effectiveness and efficiency of the controls.
B) the frequency and effectiveness of the controls.
C) the design and operating effectiveness of the controls.
D) the implementation and operating effectiveness of the controls.

Question

Quizplus · Accepted Answer

The two key issues that an auditor should consider when obtaining an understanding of a client's internal controls are the design and operating effectiveness of the controls. Design refers to whether the controls have been appropriately designed to prevent or detect material misstatements in the financial statements, while operating effectiveness refers to whether the controls are functioning as intended. The other choices, A, B, and D, are not accurate descriptions of the key issues that auditors consider when evaluating internal controls.

An Auditor Should Consider Two Key Issues When Obtaining an Understanding