The Concept of Reasonable Assurance in the Context of an Entity's

question 21

Multiple Choice

The concept of reasonable assurance in the context of an entity's internal controls recognizes that:

• A)auditors may fail to detect material misstatements.
• B)proper internal controls guarantee that material misstatements will not occur.
• C)proper internal controls preclude fraud.
• D)the costs of some controls may be too high to implement in relation to potential benefits.

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Definitions:

Adaptive

Refers to the ability of an organism or entity to change or adjust effectively to new environments or to changes in their current environment.

Correlational Data

Information collected from studies that aim to identify and measure the strength and direction of relationships between two or more variables.

Causality

The relation between cause and effect, where one event is understood to be a consequence of another.

Subjective Experience

Personal interpretations and feelings unique to an individual, not necessarily observable by others.