When Tests Internal Controls Do Not Support a Previous Conclusion

question 25

Multiple Choice

When tests internal controls do not support a previous conclusion about internal controls, the auditor should _______.

• A)obtain assurances about internal control from senior management
• B)reassess internal controls at a higher level
• C)consider withdrawing from the engagement
• D)lower inherent risk related to internal control

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Definitions:

Performance Contingency

The concept that employee performance outcomes are contingent upon certain conditions or factors.

Equity

The concept of fairness or justice in the way people are treated within various contexts, or in finance, the ownership interest in a company as represented by stocks or shares.

Effort

The amount of physical or mental energy expended towards achieving a goal or task.

Skill-Based Pay

A compensation system that rewards employees for the skills and knowledge they acquire and are able to apply in their jobs, rather than for their job title or position alone.