Which of the Following Is True Regarding the Relationship Between

question 31

Multiple Choice

Which of the following is True regarding the relationship between tests of controls and procedures to obtain an understanding?

• A)In obtaining an understanding of internal control,the procedures to obtain an understanding are applied to all controls identified during that phase.
• B)Tests of controls are applied only when the assessed control risk has not been satisfied by the procedures to obtain an understanding.
• C)Procedures to obtain an understanding are performed only on one or a few transactions.
• D)All of the above are correct.

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Definitions:

Net Exports

The value of a country's total exports minus its total imports, representing the net effect of foreign trade on an economy.

Capital Flight

A large and sudden reduction in the demand for assets located in a country

Interest Rate

The percentage of a loan that is applied as interest for the borrower, usually shown as a yearly rate.

Import Quotas

Restrictions set by a government on the quantity of a specific good that can be imported into a country.