Which of the following is the least concern of the client auditor in reviewing the report of service organization auditor on suitability of internal control design of the service organization?Select one:a.The type of documentation of the understanding of the service organization's control system.b.The systems' controls have been placed in operation.c.The accounting and internal control systems are suitably designed to achieve their stated objectives.d.The accuracy of description of the service organization's accounting and internal control systems, ordinarily prepared by the management of the service organization.

When the auditor considers that the service organization activities are significant to the client and relevant to the audit and he concludes that it would be efficient to obtain audit evidence from tests of control to support an assessment of control risk at a lower level. Such evidence may be obtained by, exceptSelect one:a.Performing tests of the client's controls over activities of the service organization.b.Review the service contract between the client and the service organization.c.Obtaining a service organization auditor's report that expresses an opinion as to the operating effectiveness of the service organization's accounting and internal control systems for the processing applications relevant to the auditd.Visiting the service organization and performing tests of control.Clear my choice

Which of the following is least likely entitled to the report of the service organization auditor on the suitability of the design and operating effectiveness of the service organization?Select one:a.Service organization's customersb.Client's auditorsc.Service organization's stockholdersd.Service organization's managementClear my choice

According to PSA 400, which of the following is correct regarding internal control system?Select one:a.In the audit of financial statements, the auditor is only concerned with those policies and procedures within the accounting and internal control systems that are relevant to the financial statements.b.The internal control system is confined to those matters which relate directly to the functions of the accounting system.c.A strong environment, by itself, ensure the effectiveness of the internal control system.d.Internal control system refers to all the policies and procedures adopted by the auditor to assist in achieving management's objective.

A proper understanding of the client's internal control is an integral part of the audit planning process. The results of the understandingSelect one:a.Bear no relationship to the extent of substantive testing to be performed.b.May be used as the basis for withdrawing from an audit engagement.c.Must be reported to the shareholders and the SEC.d.Are not reported to client management.

The auditor must identify and assess the risk of material misstatement in the financial statements. Where control activities are at the service organisation, the user auditor must still evaluate their design and determine whether they have been implemented.