Which of the following conditions must be met before an accountant can conduct an examination of an entity's internal control?
A) Management presents its assertion about the effectiveness of its internal control in a written report.
B) Management represents that there are no internal control deficiencies.
C) The accountant represents that he or she has not conducted an audit of the financial statements.
D) The accountant has designed a significant portion of the internal controls.

Question

Quizplus · Accepted Answer

Before conducting an examination of an entity's internal control, management must present its assertion about the effectiveness of its internal control in a written report. This assertion serves as the basis for the examination of internal control by the accountant. Choice B is incorrect because it is not realistic that an entity would represent that there are no internal control deficiencies. Choice C is incorrect because the fact that an accountant has or has not conducted an audit of the financial statements is irrelevant to the examination of internal control. Choice D is incorrect because if the accountant has designed a significant portion of the internal controls, the independence and objectivity of the accountant may be impaired, which is a conflict of interest.

Which of the Following Conditions Must Be Met Before an Accountant