Which of the following does an auditor consider when gaining an overall understanding of the client's internal controls?
A)Entity-wide controls at the account level only.
B)Transaction controls at the account level only.
C)Entity-wide controls at the assertion level only.
D)Both entity-wide controls and transaction controls at the account and assertion levels.

Question

Quizplus · Accepted Answer

An auditor considers both entity-wide controls and transaction controls at the account and assertion levels when gaining an overall understanding of the client's internal controls. This includes controls related to financial reporting, such as those related to the completeness, accuracy, and validity of financial statement accounts and disclosures. A thorough understanding of the client's internal controls is important for planning the audit and identifying areas of increased risk.

Which of the Following Does an Auditor Consider When Gaining