When Considering Internal Controls

question 15

Multiple Choice

When considering internal controls,

• A) auditors can ignore controls affecting internal management information.
• B) auditors are concerned with the client's internal controls over the safeguarding of assets if they affect the financial statements.
• C) management is responsible for understanding and testing internal control over financial reporting.
• D) companies must use the COSO framework to establish internal controls.

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Definitions:

Psychological Response

The mental and emotional reaction of an individual to various stimuli or situations, influenced by their psychological state.

Job Stress

The adverse reaction people have to excessive pressures or other types of demand placed on them at work, which can impact mental and physical health.

Burnout

A state of physical, emotional, and mental exhaustion caused by prolonged stress and frustration, often from job demands.

Learned Optimism

The process of developing a mindset that fosters a positive attitude towards challenges and setbacks.