In an Audit Report on the Effectiveness of ICFR for a Public

question 14

Multiple Choice

In an audit report on the effectiveness of ICFR for a public company, what does the scope paragraph explain?

• A)The auditors conducted their audit in accordance with the standards of the PCAOB.
• B)An internal control system does not eliminate all risk associated with the preparation of financial statements.
• C)A material misstatement of the financial statements will not be prevented or detected on a timely basis.
• D)Circumstances may change in the future and render controls ineffective if the controls are not modified appropriately.

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Definitions:

Habituation

The decrease in response to a stimulus after repeated presentations.

Rhythm

The patterned, recurring sequence of events, sounds, or activities, often associated with music, dance, or the natural occurrences in life.

Cadence

The rhythmic flow or pattern of sounds in language or the sequence of sounds in speech, often used in poetry, or the pace and tempo in music and physical movement.

Mother's Language

The native language spoken by one's mother, often the first language a child is exposed to and learns.