Dunn, CPA, Is Auditing the Financial Statements of Taft Co

question 488

Multiple Choice

Dunn, CPA, is auditing the financial statements of Taft Co. Taft uses Quick Service Center (QSC) to process its payroll. Price, CPA, is expressing an opinion on a description of the controls placed in operation at QSC regarding the processing of its customers' payroll transactions. Dunn expects to consider the effects of Price's report on the Taft engagement. Price's report should contain a (an) :

• A) Description of the scope and nature of Price's procedures.
• B) Statement that Dunn may assess control risk based on Price's report.
• C) Assertion that Price assumes no responsibility to determine whether QSC's controls are suitably designed.
• D) Opinion on the operating effectiveness of QSC's internal controls.

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Definitions:

Power Imbalance

A situation where there is an unequal distribution of power among individuals or groups, leading to dominance by one over the others.

Maintenance Phase

A stage in relationship development where efforts are focused on preserving and sustaining the relationship.

Fatalistic

Believing that all events are predetermined and inevitably caused by external forces, leading to a sense of powerlessness over one's future or outcomes.

External Attributional Style

A tendency to attribute one's own behaviors and outcomes to external factors or forces beyond one's personal control.