While planning for an accounts payable audit an internal auditor performs an entity level controls analysis. Which of the following statements is true regarding me approach used by the auditor?

Question

Options

• AIt enables the auditor to identify the inherent risks to the effective operation of accounts payable
• BIt enables the auditor to understand the framework of the activities and associated accounts
• Cit enables the auditor to understand the accounts payable process and its flow, including key steps
• DIt enables the auditor to categorize the population of transactions within the accounts payable

• A
  19% (5)
• B
  70% (19)
• C
  4% (1)
• D
  7% (2)

Explanation

Performing an entity-level controls analysis helps the auditor understand the overarching framework of activities and subprocesses within the accounts payable function. This approach provides a high- level view of the control environment and how different processes interrelate and contribute to the overall control objectives. By understanding the framework, the auditor can identify key controls, assess their design and implementation, and determine areas of potential risk. This foundational understanding is crucial before delving into more detailed, transaction-level

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