Good Use of a Narrative Method of Understanding a Client's

question 109

Multiple Choice

Good use of a narrative method of understanding a client's system of internal control would be when the ________.

• A)client is large and complicated
• B)is relatively small and not overly complex
• C)requests the auditor do so
• D)inherent risk is deemed to be high

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Definitions:

Deregulation

Regulatory trend toward elimination of legal restraints on competition in industries previously served by a single firm in an attempt to improve customer service and lower prices through increased competition.

Regulated Monopolies

Monopolies that are allowed to exist by the government but with restricted and controlled powers to prevent unfair practices.

Cyclically Unemployed

Individuals who are without jobs due to the downturns in the business cycle, rather than through personal choice, often temporary and affected by economic recessions.

Construction Job

Employment in the field of building, designing, or maintaining structures.