When a Compensating Control Exists,a Weakness in the System

question 23

Multiple Choice

When a compensating control exists,a weakness in the system

• A)is no longer a concern because the potential for misstatement has been sufficiently reduced.
• B)is reduced but not removed;therefore,it is still of concern to the auditor.
• C)could cause a material loss,so it must be tested using substantive procedures.
• D)is magnified and must be removed from the sampling process and examined in its entirety.

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Definitions:

Pinna

The visible part of the ear that is outside the head, which captures sound waves and directs them into the ear canal.

Middle Ear

The part of the ear that channels and amplifies sound through the eardrum, hammer, anvil, and stirrup to the inner ear.

Eardrum

A slim barrier that divides the external ear from the internal ear and oscillates when influenced by sound vibrations.

Middle Ear

The part of the ear that contains three small bones (the hammer, anvil, and stirrup) that transmit sound vibrations from the eardrum to the inner ear.