When a Compensating Control Exists, a Deficiency in the System

question 19

Multiple Choice

When a compensating control exists, a deficiency in the system:

• A) is magnified and must be removed from the sampling process and examined in its entirety.
• B) could cause a material loss, so it must be tested using substantive procedures.
• C) is reduced but not removed; therefore, it is still of concern to the auditor.
• D) is no longer a concern because the potential for misstatement has been sufficiently reduced.

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Definitions:

Initialization Statement

A statement in programming where variables are initially assigned a value.

Formal Parameters

Formal parameters are variables used in a function or method definition, representing the arguments that the function can accept when it is called.

Primitive Data Types

Basic types of data built into a programming language that represent simple values like integers and booleans, not objects.

Actual Parameters

The actual values or expressions passed to a function or method when it is called, as opposed to the formal parameters defined in the method signature.