The Auditor Need NOT Be Concerned with All Three Areas

question 31

Multiple Choice

The auditor need NOT be concerned with all three areas of internal control that apply to management.The auditor's primary concerns are with the system's ability to:

• A) ensure reliability of financial reporting.
• B) provide reliable data, safeguard assets, and comply with the Corporations Act.
• C) promote efficiency and encourage adherence to policy.
• D) provide reliable data and promote efficiency.

---

Definitions:

Decentralization

The distribution of decision-making powers from central authority to individuals or units at lower levels within an organization or state.

Responsibility Accounting

The process of measuring and reporting operating data by areas of responsibility.

Responsibility Centers

Parts of an organization treated as separate entities for managerial accounting and performance measurement, each responsible for its own revenues, expenses, and investment funds.

Decentralized Business

A business model where decision-making and operational activities are distributed across different locations or departments, rather than centralized in a single location.