It is important for the CPA to consider the competence of the entity's employees because their competence bears directly and importantly upon the
A) Cost/benefit relationship of the system of internal control.
B) Achievement of the objectives of the system of internal control.
C) Comparison of recorded accountability with assets.
D) Timing of the tests to be performed.

Question

Quizplus · Accepted Answer

The competence of the entity's employees directly affects the achievement of the objectives of the system of internal control. Employees who are not competent may not be able to perform their assigned tasks effectively or efficiently, which could result in weaknesses or breakdowns in the internal control system. On the other hand, competent employees are more likely to understand and follow internal controls, reducing the risk of errors or fraud. A and C are incorrect because the competence of the employees does not directly affect the cost/benefit relationship of the system of internal control or the comparison of recorded accountability with assets. D is incorrect because the timing of the tests to be performed is not directly related to the competence of the employees.

It Is Important for the CPA to Consider the Competence