In an audit of financial statements, an auditor's primary consideration regarding internal control is whether the control:

Question

Quizplus · Accepted Answer

Choice "B" is correct. Assessing control risk is the process of evaluating the effectiveness of an entity's internal control in preventing or detecting material misstatements in the financial statements. Choice "A" is incorrect. Management's philosophy and operating style are considered a part of the control environment. They are not the primary consideration in evaluating internal control. Choice "C" is incorrect. Providing adequate safeguards over access to assets is a type of control activity, but it is not the auditor's primary consideration regarding internal control. Choice "D" is incorrect. Policies and procedures concerning the effectiveness, economy, and efficiency of certain management decision-making processes are not relevant to the auditor's consideration of internal control.

In an Audit of Financial Statements, an Auditor's Primary Consideration