A proper understanding of the client's internal control is an integral part of the audit planning process. The results of the understandingSelect one:a.Bear no relationship to the extent of substantive testing to be performed.b.May be used as the basis for withdrawing from an audit engagement.c.Must be reported to the shareholders and the SEC.d.Are not reported to client management.

Explain why an auditor needs to obtain an understanding of the components of internal control relevant to the preparation of the financial statements.

Understanding the business and using this information appropriately assists the auditor in, exceptSelect one:a.Planning and performing the audit effectively and efficiently.b.Evaluating audit evidence.c.Assessing risks and identifying potential problemsd.Deciding whether to do tests of controls

When preparing the audit plan, the auditor must ensure that they acquired significant understanding of the entity, its environment, and its internal controls.Group of answer choicesTrueFalse

Analytical procedures used in planning an audit should focus onSelect one:a.Providing assurance that potential material misstatements will be identified.b.Assessing the adequacy of the available evidential matter.c.Enhancing the auditor's understanding of the client's business.d.Reducing the scope of tests of controls and substantive tests.

When the auditor considers that the service organization activities are significant to the client and relevant to the audit and he concludes that it would be efficient to obtain audit evidence from tests of control to support an assessment of control risk at a lower level. Such evidence may be obtained by, exceptSelect one:a.Performing tests of the client's controls over activities of the service organization.b.Review the service contract between the client and the service organization.c.Obtaining a service organization auditor's report that expresses an opinion as to the operating effectiveness of the service organization's accounting and internal control systems for the processing applications relevant to the auditd.Visiting the service organization and performing tests of control.Clear my choice