Which of the Following Would Be Least Likely to Suggest

question 38

Multiple Choice

Which of the following would be least likely to suggest to an auditor that the client's management may have overridden the internal control?

• A) Differences are always disclosed on a computer exception report.
• B) Management does not correct internal control deficiencies that it knows about.
• C) There have been two new controllers this year.
• D) There are numerous delays in preparing timely internal financial reports.

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Definitions:

Specified Price

Another term for Strike Price, indicating the predetermined price involved in a contractual agreement.

Convertible Bonds

Bonds that can be converted into a predetermined amount of the issuing company's equity at certain times during its life, usually at the discretion of the bondholder.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a specified price within a predetermined period.

Conversion Ratio

The number of shares a bondholder can receive upon converting their bonds into equity shares.