CAF-8 · Chapter 3 · Question 10 of 10
If the auditor suspects that management is overriding internal controls to manipulate financial results, which specific audit procedure is strictly required by ISA 240?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Testing the appropriateness of journal entries recorded in the general ledger and other adjustments.
Explanation
To address the risk of management override, ISA 240 specifically requires the auditor to test journal entries (especially year-end adjustments) for evidence of manipulation.
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