Management Assesses Risks as a Part of Designing and Operating

question 28

Multiple Choice

Management assesses risks as a part of designing and operating internal controls to minimize fraud and errors.Auditors assess risks to

• A)decide the evidence needed in the audit.
• B)fully implement the audit risk model.
• C)enable them to assess the completeness of internal controls.
• D)make sure that the company will continue to operate over the next year.

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Definitions:

Apparent Authority

The situation in which an agent's actions lead a third party to reasonably believe that the agent has the authority to act on behalf of the principal.

Wholesale Jeweler

A wholesale jeweler is a business entity that sells jewelry in large quantities, usually to retailers rather than directly to the public.

Retail Jewelry Store

A business establishment that specializes in selling jewelry and related accessories directly to consumers.

Personally Bound

Being legally obligated on an individual basis, usually in terms of contractual or financial responsibilities.