Understanding Components of Internal Control and Assessing the Level of Control

question 41

Multiple Choice

Understanding components of internal control and assessing the level of control risk are primarily used by the auditor to:

• A) determine the nature, timing and extent of substantive tests for financial statement assertions.
• B) modify the initial assessments of inherent risk and preliminary judgements about materiality levels.
• C) ascertain whether the opportunities to allow any person to both perpetrate and conceal irregularities are minimised.
• D) determine whether procedures and records concerning the safeguarding of assets are reliable.

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Definitions:

Hallucinations

False sensory perceptions, such as hearing voices that do not really exist.

Delusions

False beliefs held by a person who refuses to accept evidence of their falseness.

Bizarre Behavior

Actions or reactions that are highly unusual or extremely unconventional, often defying social norms.

Partial Dopamine Agonists

Medications that stimulate dopamine receptors in the brain to a lesser degree than full agonists, often used in treating schizophrenia.