Which of the Following Is Not a Reason to Assess

question 58

Multiple Choice

Which of the following is not a reason to assess control risk as high?

• A) Internal control policies or procedures are unlikely to be effective.
• B) Evaluating the effectiveness of the internal control policies or procedures would be more time consuming than another audit approach.
• C) The auditor has assessed detection risk as high.
• D) Internal control policies or procedures are unlikely to pertain to an assertion.

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Definitions:

Preferred Shares

A type of stock that provides holders with a fixed dividend, which must be paid before dividends are paid to ordinary shareholders.

Floatation Costs

The costs that a company incurs when it issues new securities, including underwriting fees, legal fees, and registration fees.

Disposable Income

The amount of money that households have available for spending and saving after income taxes have been accounted for.

Personal Income

The total amount of income received by individuals from all sources, including wages, dividends, interest, and government transfers, before any deductions.