It is important for the CPA to consider the competence of the clients' personnel because their competence has a direct impact upon the
A) cost/benefit relationship of the system of internal control.
B) achievement of the objectives of internal control.
C) comparison of recorded accountability with assets.
D) timing of the tests to be performed.

Question

Quizplus · Accepted Answer

The competence of the clients' personnel directly influences the achievement of the objectives of internal control. If personnel are competent, it is more likely that internal controls will be effective in achieving the objectives of safeguarding assets, maintaining reliable financial reporting, and ensuring compliance with laws and regulations. On the other hand, if personnel are not competent, this may increase the risk of errors, fraud, and noncompliance, which can undermine the effectiveness of internal control. Therefore, the CPA needs to assess the competence of the clients' personnel and consider this in the design and implementation of internal control procedures.

It Is Important for the CPA to Consider the Competence