When Considering Internal Control, an Auditor Should Be Aware of Reasonable

question 8

Short Answer

When considering internal control, an auditor should be aware of reasonable assurance, which recognizes that
A. Internal control may be ineffective due to mistakes in judgment and personal carelessness.
B. Adequate safeguards over access to assets and records should permit an entity to maintain proper accountability.
C. Establishing and maintaining internal control is an important responsibility of management.
D. The cost of an entity's internal control should not exceed the benefits expected to be derived.

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Definitions:

Compliance

Conformity to a social norm prompted by the desire to acquire rewards or avoid punishment.

Organizational Norms

The informal understandings that govern the behavior of members within an organization, establishing the expected standards of conduct.

Patriotic Soldier

A military personnel who deeply loves, supports, and defends their country with a strong sense of national loyalty and pride.

Internalization

Conformity to a social norm prompted by true acceptance of the beliefs, values, and attitudes that underlie the norm.