When completing the audit of internal controls for an issuer, the severity of an internal control deficiency depends on:
a. neither answer is correct
b. both answers are correct
c. whether there is a reasonable possibility that the company's controls will fail to prevent or detect a misstatement of an account balance or disclosure
d. whether the account has a history of errors
Answer: c. whether there is a reasonable possibility that the company's controls will fail to prevent or detect a misstatement of an account balance or disclosure
A bridge work-paper shows the connection between
a. management objectives and accounting system procedures
b. control evaluation findings and subsequent audit procedures
c. financial statement assertions and tests of controls
d. management objectives and entity control activities
Answer: b. control evaluation findings and subsequent audit procedures
Which of the following does not accurately summarise auditor's requirements regarding internal control?
a. test controls- public entity yes; non public entity yes
b. documenting- public entity yes; non public entity yes
c. evaluating control risk- public entity yes; non public entity yes
d. understanding- public entity yes; non public entity yes
Answer: a. test controls- public entity yes; non public entity yes
