To Adequately Plan the Appropriate Audit Evidence, Generally Accepted Auditing

question 36

Multiple Choice

To adequately plan the appropriate audit evidence, generally accepted auditing standards require the auditor to gain an understanding of the internal control structure.This understanding is obtained by:

• A) discussions with client personnel.
• B) observing client activities.
• C) reviewing organisational charts and procedural manuals.
• D) all of the above

Understand how changes in money holdings affect interest rates.

Analyze the impact of fiscal and monetary policy on aggregate demand and output.

Calculate the effect of fiscal and monetary actions using the concept of the multiplier.

Explain the Federal Reserve's roles and actions in stabilizing aggregate demand.

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Definitions:

Congress

The legislative branch of the United States federal government, composed of the House of Representatives and the Senate, responsible for making national laws.

Supremacy Clause

Article VI, Paragraph 2, of the U.S. Constitution, which states that the Constitution and all laws and treaties of the United States constitute the supreme law of the land. Thus, any state or local law that directly conflicts with the U.S. Constitution or federal laws or treaties is void.

Article VI

Refers to the Supremacy Clause within the United States Constitution, which establishes that the Constitution and federal laws are the supreme law of the land.

Enact Legislation

The process by which governmental bodies formally adopt new laws or amend existing ones.