Describe which of the three categories of broad objectives for internal controls are considered by the auditor in an audit of both the financial statements and internal control over financial reporting.

Management designs systems of internal control to accomplish three categories of objectives:

assess acceptable risk

financial reporting

set materiality

,

assess audit risk

assess fraud risks

operations

, and

assess business risk.

assess control risk.

compliance with laws and regulations.

The auditor's focus in both the audit of financial statements and the audit of internal controls is on those controls related to

assessing acceptable risk

the reliability of financial reporting

setting materiality

plus those controls related to

assessing audit risk

assessing fraud risks

operations

and to

assessing business risk

assessing control risk

compliance with laws and regulations

objectives that could

adversely

materially

slightly

affect

assessing acceptable risk.

financial reporting.

setting materiality.

1st box options:assess aceptable risk, financial reporting, set materiality

2nd box options: asses audit risk, assess fraud risk, operations

3rd box options: assess business risk, assess control risk, compliance with law and regulations

4th box options: assess aceptable risk, the reliability of financial reporting, set materiality

5th box options: asses audit risk, assess fraud risk, operations

6th box options: assess business risk, assess control risk, compliance with law and regulations

7th box options: adversely, materially, slightly

8th box options: assess aceptable risk, financial reporting, set materiality