When obtaining an understanding of an entity’s internal control, an auditor should concentrate on the substance ofcontrols rather than their form because:Select one:a.Management may establish appropriate controls but not enforce compliance with them.b.The controls may be operating effectively but may not be documented.c.The controls may be so inappropriate that no reliance is contemplated by the auditor.d.Management may implement controls whose costs exceed their benefits.

An entity's board of directors, management, and other people are the ones who carry out the process…

Answered: When obtaining an understanding of an…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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When obtaining an understanding of an entity’s internal control, an auditor should concentrate on the substance of
controls rather than their form because:
Select one:

Management may establish appropriate controls but not enforce compliance with them.

The controls may be operating effectively but may not be documented.

The controls may be so inappropriate that no reliance is contemplated by the auditor.

Management may implement controls whose costs exceed their benefits.

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