An auditor's primary consideration regarding an entity's internal controls is whether the policies and procedures
A) Affect the financial statement assertions.
B) Prevent management override.
C) Relate to the control environment.
D) Reflect management's philosophy and operating style.

Question

Quizplus · Accepted Answer

An auditor's primary consideration regarding an entity's internal controls is whether the policies and procedures affect the financial statement assertions. The auditor will evaluate whether the internal controls put in place by management serve to reduce the risk of material misstatements in the financial statements. This is the most important consideration, as the purpose of an audit is to provide assurance on the accuracy and reliability of the financial statements. Preventing management override, relating to the control environment, and reflecting management's philosophy and operating style may be important considerations, but they are not the primary concern for an auditor when evaluating internal controls.

An Auditor's Primary Consideration Regarding an Entity's Internal Controls Is