Question

Auditing

The external auditor may seek to place reliance/TRUSTon internal controls in order to restrict substantive testing.

In each of the following circumstances, select whether the external auditor is likely to place reliance/TRUST or place no reliance/NO TRUST on internal controls.

Answer 1

The external auditor may seek to place reliance/TRUSTon internal controls in order to restrict substantive testing.

In each of the following circumstances, select whether the external auditor is likely to place reliance/TRUST or place no reliance/NO TRUST on internal controls.

A company with an independent internal audit department

A family company where the financial director is related to the chief executive

A company where a fraud committed by the purchasing manager has been uncovered--