The Auditor's Primary Interest in the Control Environment Is on The

question 28

Multiple Choice

The auditor's primary interest in the control environment is on the:

• A) effectiveness of detailed policies and procedures that have been built into the system.
• B) pervasive effects that the attitudes and actions of management may have on the effectiveness of other internal controls.
• C) existence of external factors such as absentee owners and/or regulators such as the SEC.
• D) impact that the economic environment will have upon client operations.
• E) classes of transactions in the entity's operations that are significant to the financial statements.

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Definitions:

Licensing

The granting of permission by an authority or owner to use a certain piece of intellectual property, product, or service under agreed terms.

Franchise

A type of business agreement that allows one party (the franchisee) to use the branding, operational model, and products or services of another party (the franchisor).

Support Package

A compilation of resources, tools, or services provided to assist individuals, organizations, or systems in achieving specific goals or overcoming challenges.

Joint Ventures

Establish operations in a foreign country through joint ownership with local partners.