In Testing the Controls Established by Management, Auditors Should Be

question 115

Multiple Choice

In testing the controls established by management, auditors should be able to identify if there are high-risk areas for integrity violations. Auditor responsibilities for detecting integrity violations include all of the following EXCEPT:

• A) Auditors should evaluate the evidence and determine the appropriate course of action. An investigation may be warranted if indicators strongly suggest that integrity violations occurred.
• B) When significant control weaknesses are found, the auditor should conduct sufficient tests to determine if these weaknesses resulted in integrity violations. The level of testing should increase as the number or significance of control weaknesses increases.
• C) Auditors must not have the knowledge and skills to adequately identify when violations occurred.
• D) Auditors should notify the proper legal authorities, if warranted.

Explain the strategic considerations in retail location selection.

Understand the concept of insurable interest in goods and how it applies to buyers and lessees.

Comprehend when risk of loss passes in various scenarios involving goods under a contract.

Identify the conditions under which goods are considered fungible.

---

Definitions:

E-mail

A method of exchanging digital messages over the Internet, using specific addresses to send and receive communications electronically.

Verbal Content

The textual or spoken component within communication, as opposed to non-verbal elements.

Nonverbal Cues

Communication without words, including gestures, body language, facial expressions, and other visual and auditory signs.

Equal Employment Opportunity Commission

A U.S. federal agency that enforces laws prohibiting workplace discrimination and advocates for fair treatment in employment regardless of race, religion, sex, nationality, age, disability, or genetic information.