To Promote a Positive Image Within an Organization, a Chief

question 3

Multiple Choice

To promote a positive image within an organization, a chief audit executive (CAE) adjusted the audit plan to focus on assurance engagements that highlighted potential costs to be saved. Negative observations were to be omitted from engagement final communications. Which action taken by the CAE would be considered a violation of the Standards?

• A) The focus of the audit function was changed without modifying the audit charter or notifying the audit committee. II. Negative observations were omitted from the engagement final communications. III. Cost savings and recommendations were highlighted in the engagement final communications.
• B) II only
• C) I and II only
• D) I and III only
• E) I, II, and III.

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Definitions:

Expected Return

The predicted average of the probabilities of various returns an investment can generate, reflecting the anticipated earnings or loss.

Actuarially Assumed

Refers to statistical calculations and estimates made by actuaries, often related to insurance and pension fund liabilities.

Service Cost Component

The element of pension expense that represents the present value of benefits attributed by the pension plan formula to employee service during the period.

Defined Benefit Pension Plan

A type of pension plan where an employer promises a specified pension payment upon retirement, based on the employee's earnings history and tenure.