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When considering internal control, an auditor must be aware of the concept of reasonable assurance, which recognizes that the
a. Employment of competent personnel provides assurance that managements control objectives will be achieved.
b. Establishment and maintenance of internal control is an important responsibility of the management and not of the auditor.
c. Cost of internal control should not exceed the benefits expected to be derived therefrom.
d. Separation of incompatible functions is necessary to ascertain that the internal control is effective.
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