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
On April 1, 2020, Vaughn Company assigns $524,600 of its accounts receivable to the Third National Bank as collateral for a $336
Stells [14]

Answer and Explanation:

The journal entry is shown below:

On April 1, 2020

Cash $315,016

Finance charge ($524,600 × 4%) $20,984  

            To Notes payable  $336,000

(Being the cash and finance charge is recorded)

Fo recording this we debited the cash and finance charge as it increased the assets and expenses and credited the note payable as it also increased the liabilities

5 0
3 years ago
HELP ASAP!
8090 [49]
I have a feeling you didn't try for this one, all you have to do is google the ads

One with Ethos: https://www.youtube.com/watch?v=qj19l4Irdfw 

One with Logos: https://www.youtube.com/watch?v=TGbfhupxHLM
8 0
3 years ago
ABC Corporation offered a four-for-one stock split. The number of outstanding shares before the split was 15,000, and the par va
svetoff [14.1K]

<u>Answer:</u> D. 60,000 shares at $5 per share

<u>Explanation:</u>

The company has 15,000 shares and offers to split the stock four-for-one. It means that the there will be four times the number of shares but the total value of the shares, before and after the split, would remain the same.

The total value of shares = $15,000 x 20 = $300,000

Since the stock split is 4-for-1, the number of shares would be = 15000 x 4

= 60,000 shares

Therefore the total value of shares divided by the number of shares will give us the par value of the shares:

300,000 / 60,000 = $5

8 0
3 years ago
Read 2 more answers
___________ incorporation is defined as extending protections from the Bill of Rights to the state governments, one right at a t
Gnom [1K]

Answer:

Selective incorporation is defined as extending protections from the Bill of Rights to the state governments, one right at a time.

6 0
3 years ago
Advantage of pencil​
Arisa [49]

Pencils offer a great versatility – here are some obvious benefits: pencils are cheap writing utensils. there are various hardness degrees for different areas of use (see above) you can get pencils nearly everywhere.

4 0
3 years ago
Read 2 more answers
Other questions:
  • In the former USSR, state planners decided what was to be produced. They passed orders down to factories, allocating raw materia
    9·1 answer
  • "To get out the vote" is an example of what type of mission statement?
    9·2 answers
  • How many times will interest be added to the principal in 1 year if the interest is compounded quarterly?
    9·2 answers
  • Erin promises to pay her friend Stephanie$10,000 if Stephanie refrains from eating any foods that contain animal products. Steph
    13·2 answers
  • Mr. jackson borrowed money from his bank and on his life insurance to start a business. his interest rate on the bank loan was 1
    5·1 answer
  • you are forming a new company that delivers food to residents across college campuses. the primary focus is
    6·1 answer
  • When the amount earned on a deposit has become part of the principal at the end of a specified time period the concept is called
    14·1 answer
  • Item 4 A coupon bond that pays interest annually has a par value of $1,000, matures in seven years, and has a yield to maturity
    11·1 answer
  • Martha had an important meeting after lunch and wanted to avoid the hassle of waiting in line to get a meal at the cafeteria. He
    5·1 answer
  • On a piece of paper or on a device with a touch screen, hand write the solution to the following problem. Then photograph or sav
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!