Management of a Publicly-Held Organization Requires the Internal Audit Activity

question 101

Multiple Choice

Management of a publicly-held organization requires the internal audit activity to be involved with quarterly financial statements, which are made public and used internally. Which of the following explanations of management's decision is least plausible?

• A) Management may be concerned about its reputation in the financial markets.
• B) Management is following best-practice protocol, as stipulated by the Standards, which states that internal auditors must review quarterly financial statements.
• C) Management may be concerned about potential penalties that could occur if quarterly financial statements are misstated.
• D) Management may perceive that having quarterly financial information examined by the internal auditors enhances the information's value to internal decision making.

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Definitions:

Defined As Deviant

The process by which an individual's actions or behaviors are labeled by society as abnormal, immoral, or criminal.

Acceptability

The degree to which a concept, behavior, or product is considered appropriate or suitable within a social context.

Social Cohesion

The bonds that bring people together and create a sense of belonging in society, characterized by strong relationships, trust, and cooperation among members.

Functionalists

Scholars or theorists who view society as a complex system whose parts work together to promote solidarity and stability.