When MelisLee, a senior auditor, performed an audit of an electronics firm, she reviewed the control environment, performed a risk assessment, and reviewed the key business processand control activities. These activitiare part of:
A) a review of entity-level controls.
B) a review of the internal control system.
C) establishing audit risk.
D) none of the above.

Question

Quizplus · Accepted Answer

The activities described are part of a review of entity-level controls, which are the overall control environment and governance processes of an organization. This is one component of the internal control system, but the audit of internal controls would also include testing of specific controls within key business processes. The risk assessment is a separate step in the audit process, but it is closely related to the review of entity-level controls as it helps the auditor understand the organization's business risks and the potential impact on the financial statements. Therefore, choices B and C are partially correct but not the best answer. D is incorrect as the activities described are clearly part of an audit.

When MelisLee, a Senior Auditor, Performed an Audit of an Electronics