Which of the Following Is Not a Risk Factor That

question 116

Multiple Choice

Which of the following is not a risk factor that the auditor should take into account when considering the possibility of misappropriation of assets at an audit client?

• A) The presence of inventory items which are large in size and low in value
• B) Employees with access to cash who have adverse relationships with management
• C) The audit client announces required layoffs six months from now
• D) An approved vendor list to detect unauthorized or fictitious vendors is not properly controlled

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Definitions:

Endocrine Glands

Glands of the endocrine system that release hormones directly into the bloodstream to regulate bodily functions.

Kidneys

A pair of organs located in the abdominal cavity, responsible for filtering waste from the blood and producing urine.

Adrenal Medulla

The inner part of the adrenal gland that produces adrenaline and noradrenaline, hormones involved in stress response.

Sympathetic Nervous System

Part of the autonomic nervous system responsible for the body's 'fight or flight' response, regulating heart rate, blood pressure, and other functions.