{"id":32718,"date":"2024-04-15T09:05:50","date_gmt":"2024-04-15T09:05:50","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=32718"},"modified":"2024-04-15T09:05:50","modified_gmt":"2024-04-15T09:05:50","slug":"the-sequence-of-steps-in-the-auditors-consideration-of-internal-control-is-as-follows","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-sequence-of-steps-in-the-auditors-consideration-of-internal-control-is-as-follows\/","title":{"rendered":"The sequence of steps in the auditor’s consideration of internal control is as follows:"},"content":{"rendered":"

[amp_mcq option1=”Obtain an understanding, design substantive test, perform tests of control, and make a preliminary assessment of control risk” option2=”Design substantive tests, obtain an understanding, perform tests of control, and make a preliminary assessment of control risk” option3=”Obtain an understanding, make a preliminary assessment of control risk, perform tests of control, design substantive procedures” option4=”Perform tests of control, obtain and understanding, make a preliminary assessment of control risk, design” correct=”option3″]<\/p>\n

The correct answer is: C. Obtain an understanding, make a preliminary assessment of control risk, perform tests of control, design substantive procedures.<\/p>\n

The auditor’s consideration of internal control is a four-step process:<\/p>\n

    \n
  1. Obtain an understanding of the entity’s internal control. This includes understanding the entity’s objectives, its business processes, and the related controls.<\/li>\n
  2. Make a preliminary assessment of control risk. This is an assessment of the likelihood that the entity’s internal control will prevent or detect material misstatements.<\/li>\n
  3. Perform tests of control. This is the process of evaluating the effectiveness of the entity’s internal control.<\/li>\n
  4. Design substantive procedures. This is the process of designing tests to detect material misstatements in the financial statements.<\/li>\n<\/ol>\n

    The auditor’s consideration of internal control is an important part of the audit process. It helps the auditor to assess the risk of material misstatement in the financial statements and to design appropriate audit procedures.<\/p>\n

    Option A is incorrect because it does not include the step of making a preliminary assessment of control risk.<\/p>\n

    Option B is incorrect because it does not include the step of obtaining an understanding of the entity’s internal control.<\/p>\n

    Option D is incorrect because it does not include the step of designing substantive procedures.<\/p>\n","protected":false},"excerpt":{"rendered":"

    [amp_mcq option1=”Obtain an understanding, design substantive test, perform tests of control, and make a preliminary assessment of control risk” option2=”Design substantive tests, obtain an understanding, perform tests of control, and make a preliminary assessment of control risk” option3=”Obtain an understanding, make a preliminary assessment of control risk, perform tests of control, design substantive procedures” option4=”Perform … <\/p>\n

    Detailed SolutionThe sequence of steps in the auditor’s consideration of internal control is as follows:<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[698],"tags":[],"class_list":["post-32718","post","type-post","status-publish","format-standard","hentry","category-auditing","no-featured-image-padding"],"yoast_head":"\nThe sequence of steps in the auditor's consideration of internal control is as follows:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-sequence-of-steps-in-the-auditors-consideration-of-internal-control-is-as-follows\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The sequence of steps in the auditor's consideration of internal control is as follows:\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=”Obtain an understanding, design substantive test, perform tests of control, and make a preliminary assessment of control risk” option2=”Design substantive tests, obtain an understanding, perform tests of control, and make a preliminary assessment of control risk” option3=”Obtain an understanding, make a preliminary assessment of control risk, perform tests of control, design substantive procedures” option4=”Perform ... 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