When the Auditor Identifies an Area of the Accounting System

question 8

Multiple Choice

When the auditor identifies an area of the accounting system with missing controls (i.e. ,a weakness or deviation) ,this would lead to a modification of the audit program in that area that would

• A)increase the amount of tests of controls.
• B)increase the reliance on tests of controls.
• C)cause the issuance of a qualified or adverse opinion.
• D)eliminate the need for a test of controls.

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Definitions:

Expansionary Gap

A situation in an economy where the real GDP is higher than the potential GDP, often leading to inflation.

Active Approach

A strategy, especially in investing or management, where decisions are made based on hands-on involvement and regular assessment of conditions.

SRAS Curve

Short-Run Aggregate Supply Curve represents the relationship between the total supply of goods and services produced by a country and the price level in the short term, holding wages and input prices constant.

Active Approach

A strategy involving regular and direct intervention or actions to achieve a particular goal or outcome.