Which of the Following Is Not an Underlying Principle Related

question 109

Multiple Choice

Which of the following is not an underlying principle related to risk assessment?

• A) The organization should have clear objectives in order to be able to identify and assess the risks relating to the objectives.
• B) The auditors should determine how the company's risks should be managed.
• C) The organization should consider the potential for fraudulent behavior.
• D) The organization should monitor changes that could impact internal controls.

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Definitions:

Record Depreciation Expense

The process of allocating the cost of tangible assets over their useful lives to accurately reflect their consumption and wear and tear.

Financial Statements

The formal records of the financial activities and position of a business, individual, or other entity, presenting the results of operations and the financial status through three primary documents: balance sheet, income statement, and cash flow statement.

Net Income

The residual profits a company holds after deducting expenses, taxes, and costs from the gross income.

Stockholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities; also known as shareholders' equity.