If an Auditor Has Determined That the Client Has an Excellent

question 56

Multiple Choice

If an auditor has determined that the client has an excellent internal control structure:

• A) business risk is significantly reduced.
• B) the type of evidence required changes, but not the quantity.
• C) the amount of audit evidence to be collected might be reduced relative to a situation where the control structure is not adequate.
• D) the auditor can conclude that there is reasonable assurance that the financial statements do not contain material misstatements.

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Definitions:

Punitive Damages

Financial compensation awarded to an injured party, beyond actual damages, intended to punish the wrongdoer.

Compensate

To provide something, usually money, to someone in recognition of loss, suffering, or injury incurred; to make up for something unwelcome or unpleasant.

Victims

Individuals or entities who suffer harm or loss due to another's actions or events beyond their control.

Invasion of Privacy

Unauthorized intrusion into the personal life of another, without just cause, which can give the person whose privacy has been invaded a right to bring a lawsuit.