I'm missing something… what does this answer have to do with the question?

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  • #198086
    Anonymous
    Inactive

    Can someone explain what part of this question has anything to do with a compilation or review? The questions says “auditor” and “audit evidence”. I understand that it is a nonissuer, but I still don’t get how the answer relates.

    Question:

    An auditor of a nonissuer should design tests of details to ensure that sufficient appropriate audit evidence supports which of the following?

    A.

    The planned level of control risk

    B.

    Management’s assertions that internal controls exist and are operating efficiently

    C.

    The effectiveness of internal controls

    D.

    The planned level of assurance at the relevant assertion level

    The correct answer is D. Here is the explanation given…

    In a review engagement or compilation engagement, the accountant should accumulate evidence to obtain the relevant assertion level. The other answer choices are incorrect because in a review engagement or compilation engagement, the accountant does not contemplate obtaining an understanding of the entity’s internal control.

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