PCAOB Standards Require the Auditor to Evaluate the Effectiveness of the Audit

question 48

Multiple Choice

PCAOB standards require the auditor to evaluate the effectiveness of the audit committee as part of understanding the control environment and monitoring. Which of the following is not a factor the auditor should consider in making this evaluation?

• A) The audit committee's responsiveness to issues raised by the auditor.
• B) The independence of the audit committee from management.
• C) Compensation practices with respect to members of the audit committee.
• D) The clarity with which the audit committee's responsibilities are articulated.
• E) The audit committee's interaction with key members of financial management.

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Definitions:

Saving Face

Efforts made by individuals or groups to avoid embarrassment or maintain dignity and respect in the eyes of others.

Appreciative Inquiry

An approach focusing on identifying and building upon an organization's strengths and successes rather than problems.

Discovery

The act or process of finding or learning something new that was not known before.

Dreaming

A series of thoughts, images, and sensations occurring in a person’s mind during sleep.