It Is Important for the Public Accountant to Consider the Competence

question 29

Multiple Choice

It is important for the public accountant to consider the competence of the audit clients' employees because their competence bears directly and importantly upon the

• A) cost/benefit relationship of internal controls.
• B) achievement of the objectives of the system of internal control.
• C) comparison of recorded accountability with assets.
• D) timing of the tests to be performed.

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Definitions:

Competitive Price-Searcher

A market condition where firms actively seek to set prices competitively, often through the differentiation of products or services, to gain advantage over rivals.

Market Equilibrium

A condition or state where the quantity demanded of a good or service at a certain price equals the quantity supplied, leading to a stable market condition.

Collusion

An agreement, usually secretive, between firms to fix prices, limit supply, or inhibit competition.

Candy Bar Manufacturers

Companies or entities that specialize in producing and distributing candy bars.