Auditors Will Have More Confidence in Internal Controls and Audit

question 62

Multiple Choice

Auditors will have more confidence in internal controls and audit evidence generated internally _______.

• A)with a client that maintains an effective control environment
• B)with a client that maintains a poor control environment
• C)if the controls are centralized and controlled by one department
• D)if the audit evidence is received from one department of function only

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Definitions:

EOQ

Economic Order Quantity (EOQ) is an inventory management formula that determines the ideal order size that minimizes the total costs of holding and ordering inventory.

Ordering Costs

Expenses incurred in placing and receiving orders from suppliers, including costs related to ordering and receiving goods.

Inventory Value

The reported value of a company's goods or materials that have not yet been sold, calculated based on the cost of acquisition or manufacturing.

Cash Balances

Cash Balances are the amount of cash or cash equivalents that a company or an individual holds.