In the audit of financial statements, an auditor's primary consideration regarding an internal control policy or procedure is whether the policy or procedure:
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

When considering internal control policies or procedures, an auditor's primary consideration is whether they affect management's financial statement assertions. The policies or procedures must ensure the completeness, accuracy, and validity of financial statement information. While considerations of management philosophy and style, safeguarding assets, and enhancing decision-making processes are also important, they are not the primary focus in the audit of financial statements.

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