Which of the Following Auditor Concerns Most Likely Could Be

question 760

Multiple Choice

Which of the following auditor concerns most likely could be so serious that the auditor concludes that a financial statement audit cannot be performed?

• A) Management fails to modify prescribed internal controls for changes in information technology.
• B) Internal control activities requiring segregation of duties are rarely monitored by management.
• C) Management is dominated by one person who is also the majority stockholder.
• D) There is a substantial risk of intentional misapplication of accounting principles.

---

Definitions:

Production Possibilities

Production possibilities refer to the different combinations of goods and services that an economy can produce given its available resources and technology, illustrated by the production possibilities frontier (PPF).

Consumer Goods

Products and services that are consumed by individuals or households to satisfy their immediate needs and wants.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing an action.

Autos

Short for automobiles, referring to passenger vehicles designed for personal transportation.