An Important Consideration in Assessing Inherent Risk for Purchase Transactions

question 4

Multiple Choice

An important consideration in assessing inherent risk for purchase transactions is any motivation management may have to misstate expenditure. Which of the following is not a factor that may contribute to misstatement?

• A) the need to achieve announced profitability targets.
• B) the need to disclose concern over control problems.
• C) temptations for employees to make unauthorised purchases.
• D) temptations for employees to misappropriate purchased assets.

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Definitions:

Marx

Karl Marx, a 19th-century philosopher, economist, and political theorist known for his critical analysis of capitalism and his influence on the development of socialist thought.

Gramsci

Italian Marxist philosopher and politician Antonio Gramsci, known for his theory of cultural hegemony, which describes how states use cultural institutions to maintain power in capitalist societies.

Ruling Relations

Power dynamics and structured relationships that govern the interactions and decisions within a social or organizational setting.

Marx

A philosopher, economist, and social scientist whose work in the 19th century focused on the relationship between workers and capitalists, leading to the development of Marxist theory.