A Thorough Understanding of the Client's Business and Industry and Knowledge

question 18

Multiple Choice

A thorough understanding of the client's business and industry and knowledge about the company's operations are essential for doing an adequate audit. Why do auditors need greater knowledge about major customers and suppliers and related risks?

• A) Information technology connects these organizations, so they affect each other.
• B) Information technology provides rapid information about organizations.
• C) There is increased importance of human capital and other intangible assets.
• D) Joint ventures and strategic alliances affect client business risks.

Learn the importance of efficiency and speed in distribution facilities and networks.

Recognize the challenges in resource utilization and management within distribution, including seasonal variations.

Understand the principles of centralized versus decentralized inventory, including their impact on lead times and transportation costs.

Understand the significance of slotting within a distribution facility to optimize materials handling and space efficiency.

---

Definitions:

Correspondence

In communication, it refers to the exchange of messages or information between two or more parties either through speaking, writing, or using some other medium.

Attitudes And Behaviour

The study of the relationship between people's evaluative orientations and their actions, emphasizing how attitudes can influence or predict behavior.

Perceived Behavioural Control

An individual's belief about the ease or difficulty of performing a particular behavior, influenced by the resources and obstacles anticipated.

Theory Of Planned Behaviour

Modification by Ajzen of the theory of reasoned action. It suggests that predicting a behaviour from an attitude measure is improved if people believe they have control over that behaviour.