A prospective client informs you that all officers and employees of the company are bonded, and he requests that under these circumstances you forgo a consideration of internal control in order to reduce the cost of an audit. Construct a logical reply to this request.
Answer to relevant QuestionsWhat is a management letter? What is the letter’s significance?The definition of internal control as contained in COSO’s Internal Control–Integrated Frame-work and the professional standards is quite broad and comprehensive.a. Define internal control and its purpose.b. Explain the ...During your first audit of a medium-size manufacturing company, the owner, John Bell, explains that in order to establish clear-cut lines of responsibility for various aspects of the business, he has made one employee ...Answer the following questions relating to tests of controls and control risk.a. Tests of controls do not address:(1) How controls were applied.(2) How controls were originated.(3) The consistency with which controls were ...What consideration, if any, may independent auditors give to the work of a client’s internal audit staff?
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