In an audit of financial statements, an auditor's primary consideration regarding an internal control policy or activity is whether the policy or activity:
A)reflects management's philosophy and operating style.
B)affects management's financial statement assertions.
C)provides adequate safeguards over access to assets.
D)enhances management's decision making processes.

Question

Quizplus · Accepted Answer

The primary consideration of an auditor regarding internal control policy or activity is whether it affects management's financial statement assertions, as it directly impacts the accuracy and reliability of the financial statements. While management's philosophy and operating style, safeguards over asset access, and decision-making processes are also important factors, they are secondary considerations.

In an Audit of Financial Statements, an Auditor's Primary Consideration