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:

Aesthetic

Pertaining to the nature of beauty, art, and taste, and the creation and appreciation of beauty in the arts and nature.

Genetic Makeup

The complete set of genes or genetic material present in a cell or organism, synonymous with genotype.

Hans Eysenck

A British psychologist best known for his work on intelligence and personality, especially his development of the theory of personality traits.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for concepts like archetypes, collective unconscious, and individuation.