Auditors Must Understand the Business Functions and Documents and Record

question 60

True/False

Auditors must understand the business functions and documents and record for the payroll and personnel cycle before they can assess control risk and design test of controls and substantive tests of transactions.

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Definitions:

Substantive Rationality

A type of rationality that considers the values, ethics, and social implications of actions rather than merely focusing on the most efficient means to an end.

Formal Rationality

A decision-making process based on rules, regulations, and procedures, often associated with bureaucracy and organizational efficiency.

Ontologically

Related to the branch of metaphysics dealing with the nature of being.

Ambiguity

A state or condition that allows for multiple interpretations or lacks clear definition, often leading to confusion or uncertainty.