When Dealing with Laws and Regulations That Do Not Have

question 163

Multiple Choice

When dealing with laws and regulations that do not have a direct effect on the financial statements, the auditor

• A) should inquire of management about whether the entity is in compliance with such laws and regulations.
• B) has no responsibility to determine if any violations of these laws has occurred.
• C) must report all violations, including inconsequential violations, to the audit committee.
• D) should perform the same procedures as for violations having a direct effect on the financial statements.

Differentiate between microeconomics and macroeconomics and their respective fields of study.

Understand the concept of opportunity costs and its application in decision making.

Identify the distinction between positive and normative statements and their roles in economics.

Recognize the economizing problem as a fundamental economic issue.

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Definitions:

Referent Power

A form of influence based on the leader's personal characteristics, where followers identify with and want to emulate the leader.

Union Leader

An individual elected or appointed to represent and advocate for the interests of members within a labor union.

Government Grants

Financial awards given by the government to individuals, organizations, or companies to support activities beneficial to the public without expecting repayment.

Organizational Culture

A system of shared beliefs, values, customs, behaviors, and artifacts that the members of an organization use to cope with their world and with one another.