$1: In obtaining an understanding of the internal control policies and procedures, the auditor noted that incompatible functions of handling cash and preparing bank reconciliation is delegated to one employee of the company, hence the auditor assessed control risk at the maximum level for cash existence, rights, and valuation assertions. $2: The following procedures may be performed to determine if the control activity is suitably designed to prevent or detect misstatements (a) inquiries of appropriate personnel, (b) inspection of documents and reports, (c) confirmation of inventory from public warehouses. $3: Transactions are the basic components of business operations and are, therefore, the primary subject matter of internal control. A: Ifall statements are correct. B-If only one statement is correct. C- If only two statements are correct. D- If all statements are incorrect.
$1: In obtaining an understanding of the internal control policies and procedures, the auditor noted that incompatible functions of handling cash and preparing bank reconciliation is delegated to one employee of the company, hence the auditor assessed control risk at the maximum level for cash existence, rights, and valuation assertions.
$2: The following procedures may be performed to determine if the control activity is suitably designed to prevent or detect misstatements (a) inquiries of appropriate personnel, (b) inspection of documents and reports, (c) confirmation of inventory from public warehouses.
$3: Transactions are the basic components of business operations and are, therefore, the primary subject matter of internal control.
A: Ifall statements are correct.
B-If only one statement is correct.
C- If only two statements are correct.
D- If all statements are incorrect.
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