For Small Clients It Is Often More Efficient to Adopt

question 23

Multiple Choice

For small clients it is often more efficient to adopt the predominantly substantive approach. Which of the following is a reason for this:

• A) they may not have adequate resources to implement all appropriate controls.
• B) controls may not be effective.
• C) the size of the entity may make it inefficient for the auditor to rely on these controls.
• D) all of the above.

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Definitions:

General Partner

A member of a partnership who has unlimited liability and is active in the daily management of the business.

Insider

An individual who has access to confidential or non-public information about a company, primarily due to their relationship with the company.

Limited Offers

Promotions or sales propositions available for a restricted time frame or quantity.

Intrastate Issues

Matters or concerns that arise within a single state and are governed by that state's laws rather than federal law.