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:

Prewired

A term indicating that certain behaviors or abilities are innate or inherent to an organism, often present from birth.

Nervous Systems

The complex network of nerves and cells that carry messages to and from the brain and spinal cord to various parts of the body.

Cross-Sequential Research

An approach that combines the longitudinal and cross-sectional methods by following individuals of different ages for abbreviated periods of time.

Longitudinal

A research design in which the same subjects are observed or tested repeatedly over a period of time.