It is important for the CPA to consider the competence of the audit client'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 audit client's employees is directly related to the achievement of the objectives of the system of internal control. If the employees are competent, they can implement and maintain a strong system of internal control, which increases the effectiveness of the audit. On the other hand, if the employees are not competent, it can result in weak internal controls, increasing the risk of material misstatement in the financial statements. Therefore, the auditor must assess the competence of the client's employees to determine the nature, timing, and extent of audit procedures necessary to achieve the objectives of the audit.

It Is Important for the CPA to Consider the Competence