Which of the following is not required by the auditing standards for the auditor to use the "top-down approach" to audit internal controls over the financial reporting process?
A)identify entity level controls
B)identify all instances of management over-ride of controls
C)consider whether the company maintains controls to address the risk of fraud including the risk of management override of controls
D)identify relevant assertions associated with significant accounts and disclosures

Question

Quizplus · Accepted Answer

The auditing standards require the auditor to use the top-down approach to audit internal controls over the financial reporting process. The approach involves identifying entity level controls, evaluating the operating effectiveness of those controls, and identifying and testing the controls at the transaction and account level. Additionally, the auditor is required to consider whether the company maintains controls to address the risk of fraud, identify relevant assertions associated with significant accounts and disclosures, and obtain an understanding of the company's information system, including relevant control activities, and the risks that the system presents. However, the standards do not require the auditor to identify all instances of management override of controls as part of the top-down approach.

Which of the Following Is Not Required by the Auditing