An Audit of a Web-Based Third-Party Payment Processor Determined That

question 364

Multiple Choice

An audit of a Web-based third-party payment processor determined that a programming error enabled customers to create multiple accounts for each mailing address. This caused problems during the processing of credit card transactions. Management agreed to correct the program and notify customers with multiple accounts that the accounts would be consolidated. What should the auditor do in response?

• A) Amend the scope of the subsequent audit to verify that the program was corrected and that accounts were consolidated. II. Evaluate the adequacy and effectiveness of the corrective action proposed by management. III. Schedule a follow-up review to verify that the program was corrected and the accounts were consolidated. IV. Do nothing because management has agreed to address the problem.
• B) III only
• C) IV only
• D) I and II only
• E) II and III only

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Definitions:

Risk-Neutral Investor

An individual who is indifferent to risk when making investment decisions, focusing solely on the expected returns.

Risk-Averse Investor

An investor who prefers lower risks, often accepting lower returns to avoid potential losses.

Risky Asset

A type of financial instrument or investment that carries a higher degree of risk, potentially leading to greater returns or significant losses.

Risk Free Asset

An investment with a guaranteed return and no risk of financial loss, typically government bonds.