Which of the Following Events Occurring in the Year Under

question 530

Multiple Choice

Which of the following events occurring in the year under audit would most likely indicate that internal controls utilized in previous years may be inadequate in the year under audit?

• A) The entity announced that the internal audit function would be eliminated after the balance sheet date.
• B) The audit committee chairperson unexpectedly resigned during the year under audit.
• C) The chief financial officer waived approvals on all checks to one vendor to expedite payment.
• D) The frequency of accounts payable check runs was changed from biweekly to weekly.

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Definitions:

Physical Arousal

A physiological response involving increased heart rate, muscle tension, blood pressure, and breathing rate, often due to excitement or physical activity.

Subliminal Stimulation

A sensory stimulus that is below an individual's threshold for conscious perception but can still influence behavior or thought.

Pupil Contraction

The process by which the pupil decreases in size to limit the amount of light entering the eye.

James-Lange Theory

A theory of emotion proposing that emotions occur as a result of physiological reactions to events. According to this theory, we feel emotion because of biological changes caused by stress.