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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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