When an Audit Client Uses a Service Organization to Manage

question 127

Multiple Choice

When an audit client uses a service organization to manage their investment activity,

• A) the auditor can always rely on the internal controls of the service organization.
• B) the auditor must state in their audit opinion that the client uses a service organization.
• C) the auditor can rely on the internal controls of the service organization if the service organization's auditor issues a report on their internal control.
• D) the auditor must rely on the service organization to determine the fair level 1, 2, and 3 estimates.

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Definitions:

Age Discrimination

The unfair treatment of individuals based on their age, particularly in employment practices.

Mental Exhaustion

A state of extreme mental fatigue caused by prolonged cognitive activity, often resulting in reduced productivity and motivation.

Job Stress

The harmful physical and emotional responses that occur when the requirements of a job do not match the capabilities, resources, or needs of the worker.

Reduced Feelings Of Control

An emotional state where an individual perceives they have less influence or management over their environment and outcomes.