An Auditor Evaluates the Client's System of Internal Control in Order

question 62

Multiple Choice

An auditor evaluates the client's system of internal control in order to:

• A) ascertain whether irregularities are probable.
• B) determine the extent of tests of controls which must be performed.
• C) determine the extent of substantive tests which must be performed.
• D) ascertain whether any employees have incompatible functions.

---

Definitions:

Marginal Cost

The expense incurred from the manufacture of an extra single unit of a product or service.

Opportunity Cost

The expense incurred from not choosing the second-best option available during decision-making.

Marginal Cost

The swell in aggregate expenditure due to the production of an additional unit of a product or service.

Environment Pollution

The contamination of the natural environment by harmful substances or activities, leading to adverse effects on ecosystems and human health.