Consider the statements below as you answer the next question: • The chief financial officer of TNL Corporation is a certified public accountant.• OBP Corporation's internal audit manager is a certified fraud examiner.• CPQ Corporation maintains a set of systems flowcharts that describe current business processes.• DKM Corporation encrypts all data transmitted over its wireless network.Which statements relate to the third generic step in a financial statement audit?
A)TNL and DKM
B)TNL and CPQ
C)DKM and CPQ
D)TNL, DKM and CPQ

Question

Quizplus · Accepted Answer

The third generic step in a financial statement audit involves understanding the entity and its environment, including its internal control. CPQ's maintenance of systems flowcharts and DKM's encryption of data relate to understanding and assessing internal controls.

Consider the Statements Below as You Answer the Next Question