Which of the following correctly define and explain internal control?

a$.$ Internal control helps to provide reasonable assurance to firm stakeholders pertaining

to the company achieving its goals and mission etc.

b$.$ Internal control helps a company achieve its stated goals and objectives, and should

help the firm to run more efficiently.

c$.$ In order for an external auditor to understand a client$$s system of internal control, they

must first gain an understanding of the client$$s control risk.

d$.$ Internal control is a process controlled by the client$$s external audit function, and under

the control of the client$$s board of directors.

$3.$ Neil, an audit manager at Bullock CPAs is currently working on the audit of Sandringham

Enterprises, LLC$.$ Neil is examining a sample of customers to check their payment history and

credit limits$.$ What type of control is Neil examining?

a$.$ Neil is examining an accuracy control to determine if payments were made on time and

if customer credit limits have been exceeded.

b$.$ Neil is examining a detective control designed to identify customers who have

exceeded their credit limits$.$

c$.$ Neil is examining a preventive control, which should stop customers who have

exceeded their credit limits from purchasing more goods.

d$.$ Neil is checking a classification control which ensures that customers who have

exceeded their credit limits are classified separately for further follow up$.$

$4.$ An auditor should obtain knowledge of a client$$s information and communication system in

order to understand each of the following, except:

a$.$ How transactions are initiated, processed, and reported.

b$.$ The process used to prepare financial statements.

c$.$ The means used by an entity to communicate financial reporting roles to its staff.

d$.$ The means used by an entity to ensure that management directives are carried out.