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    Question

    Which of the following is NOT part of auditor’s

    understanding of the entity and its environment under SA 315?
    A Industry and regulatory environment Correct Answer Incorrect Answer
    B Nature of entity Correct Answer Incorrect Answer
    C Internal control system Correct Answer Incorrect Answer
    D Financial reporting framework Correct Answer Incorrect Answer
    E Management’s future bonus expectations Correct Answer Incorrect Answer

    Solution

    Auditors focus on business environment, industry, controls, reporting, not personal expectations of management bonuses.

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