1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alex787 [66]
3 years ago
11

The auditor begins selecting controls to test by _______. by understanding the entity and the business and determining the risk

of material fraud or error at the financial statement level by understanding the entity and all other industries and determining the risk of material fraud or error at the financial statement level asking management which controls they would prefer the auditor to test checking the same controls as the prior year
Business
1 answer:
Gemiola [76]3 years ago
6 0

Answer:

by understanding the entity and the business and determining the risk of material fraud or error at the financial statement level.

Explanation:

An auditor refers to an authorized individual who review, examine and verify the authenticity and accuracy of business financial records or transactions.

Internal controls can be defined as the policies, set of rules, and procedures implemented or put in place by an organization to protect its assets, boost efficiency, enhance financial accountability, enforce adherence to company policies and prevent fraudulent behaviors among the employees.

The main purpose of internal controls is to guarantee that loss is eliminated by ensuring that there is an accurate and reliable accounting system.

An internal control involves the timely use of both internal and external sources of auditing or financial reporting and as such enhance the maintenance of accurate and proper financial records which would also improve their operational efficiency.

Hence, internal controls if properly executed helps to increase operational efficiency, protect and safeguard assets, provides accurate financial information, prevents fraudulent or unlawful behaviors, timeliness of financial records and reporting.

In order to start the selection of controls to test, an auditor has to understand the entity and the business, as well as determine the risk of material fraud or error at the financial statement level.

Financial statements can be defined as a document used for the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors. These includes balance sheet, statement of retained earnings and income statement.

A standard unmodified opinion is an opinion where financial statements are presented free of any misinterpretation, in all material respects, in accordance with standards known as Generally Accepted Accounting Principles (GAAP) to provide a high level of assurance.

The standard unmodified opinion comprises of report title, audit report address, introduction paragraph, managements responsibility, auditor's responsibility, opinion paragraph, audit report date and signature and address of certified public accountant firm.

Additionally, an unmodified opinion on financial statements can be defined as an opinion issued by an auditor stating that there are no material misstatements and this simply implies that the, the financial statement represents a true and fair perspective of the accounting information of a business.

You might be interested in
Munoz Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different u
vredina [299]

Answer:

The correct answer is 2.7 years for plane 1 and 4 years for plane 2.

Plane 1 should be accepted.

Explanation:

According to the scenario, the computation of the given data are as follows:

Plane 1 Cost = $15,660,000

Annual cash inflow = $5,800,000

Plane 2 cost = $34,400,000

Annual cash inflow = $8,600,000

So, we can calculate the payback period by using following formula:

Payback period = cost ÷ Annual cash flow

So, For Plane 1 = $15,660,000 ÷ $5,800,000 = 2.7 years

For plane 2 = $34,400,000 ÷ $8,600,000 = 4 years

As, Plane 1 has less payback period so it should be accepted.

7 0
3 years ago
What is return on​ investment? A. The amount of income an investment center earns relative to the size of its assets B. Excess i
damaskus [11]

Answer:  Option A

                   

Explanation:  In simple words, return on investment refers to the mount of profit that an investor earns in relation to the cost he or he incurs by undertaking an investment.

It is used as a performance measure to evaluate the efficiency and effectiveness of a project by comparing it with other investments having some characteristics.

Hence from the above we can conclude that the correct option is A .  

3 0
3 years ago
The Clemson Company reported the following results last year for the manufacture and sale of one of its products known as a Tam.
serious [3.7K]

Answer:

See below

Explanation:

According to the information above, there would be no sales if TAM is discontinued as there would be no cost traced to it safe for $145,000 for fixed manufacturing overhead.

We already know that the net operating loss was $55,000 the fixed manufacturing overhead of $145,000 would further increase the loss by $90,000

5 0
2 years ago
What is the smallest level at which life may exist
DerKrebs [107]
CELL is the smallest level.........
6 0
3 years ago
What are the quantitative and qualitative techniques available to help planning
RSB [31]

Answer:

Common quantitative methods include experiments, observations recorded as numbers, and surveys with closed-ended questions. ... Common qualitative methods include interviews with open-ended questions, observations described in words, and literature reviews that explore concepts and theories

Explanation:

6 0
2 years ago
Other questions:
  • 5. Suppose your demand for a good is inelastic. Which word would best describe this good? normal a. inferior d. replaceable b. n
    9·1 answer
  • Which of the following use direct language effectively? Check all that apply. Linda’s expert planning skills have helped advance
    15·1 answer
  • The PGA operates as two divisions: one that governs the club professionals who serve amateur players and another, known today as
    5·1 answer
  • An individual purchased a taxable corporate bond at a premium. The bond has a remaining ten year maturity period. For federal in
    15·1 answer
  • Aaron questions whether there is consideration for his contract with Banquet Hall to exchange his musical performance of country
    9·1 answer
  • Dobson Construction has an investment project that would cost $150,000 today and yield a one-time payoff of $167,000 in three ye
    11·2 answers
  • Which of the following should you keep in mind when targeting high-level networkers on sites such as LinkedIn?
    13·1 answer
  • Tara westmont, the proprietor of tiptoe shoes, had annual revenues of $205,000, expenses of $113,700, and withdrew $26,000 from
    12·2 answers
  • Employees at Rayon Enterprises earn one day a month of vacation compensation (twelve days total each year). Vacation compensatio
    12·1 answer
  • Insurance Reading Quiz
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!