A Computer Software Firm Allows Its Sales Team to Make

question 69

Multiple Choice

A computer software firm allows its sales team to make material modifications to standard software contracts.What should be the auditors' primary concern in this situation?

• A)Increased risk of misstatement of commissions expense.
• B)Increased risk of misstatement of revenue.
• C)Increased risk of uncollectible accounts.
• D)Increased risk of loss of software copyright.

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Definitions:

Breached

The violation of a law, duty, or agreement.

Writing Contracts

The process of formally documenting agreements between parties in written form, ensuring legal enforceability and clarity of terms.

Tender Delivery

The process of formally presenting goods or documents to a designated party, often in fulfillment of a contractual obligation.

Consequential Damage

Indirect losses that occur as a result of a breach of contract or other wrongful act, beyond the immediate damage or loss incurred.