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The most likely explanation why the auditor’s examination cannot reasonably be expected to bring all acts of noncompliance with laws and regulations by the client to the auditor’s attention is that:
(a) Acts of noncompliance with laws and regulations by clients often relate to operating aspects rather than accounting aspects –> CORRECT
(b) Acts of noncompliance with laws and regulations may be perpetrated by the only person in the client’s organization with access to both assets and the accounting records.
(c) Acts of noncompliance with laws and regulations are perpetrated by management override of internal accounting controls.
(d) The client’s system of internal accounting control may be so strong that the auditor performs only minimal substantive testing.I don’t get why the correct choice is (a). In fact, idk what this answer choice really means. I chose (c) because I realized that it’s talking about the inherent limitation of internal controls so I thought that could be why auditor cannot be expected to discover all acts of noncompliance.
Thanks.
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