Which of the Following Actions Indicates a Lack of Due

question 325

Multiple Choice

Which of the following actions indicates a lack of due professional care by an internal auditor performing an audit of a store's cash function?

• A) The audit report included a well-supported recommendation for a reduction in staff even though such a reduction might adversely impact morale.
• B) The auditor tested samples of transactions to test the cash function's process flows.
• C) After determining that the cash function internal controls were strong, the audit report assured senior management that fraud was not present.
• D) The auditor discovered an instance of potential fraud and reported it immediately to management, but did not alert authorities outside the organization.

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Definitions:

Strict Liability

The doctrine under which people may be liable for injuries to others whether or not they have been negligent or committed an international tort. Also called absolute liability.

Unavoidably Dangerous

Products or activities that cannot be made completely safe, no matter the amount of caution used in their design or execution.

Punitive Damages

Damages in excess of actual losses suffered by the plaintiff awarded as a measure of punishment for the defendant’s wrongful acts. Also called exemplary damages.

Strict Liability

Legal responsibility for damages or injury, even if the person found strictly liable was not at fault or negligent.