Which of the Following Factors Is Most Likely to Affect

question 66

Multiple Choice

Which of the following factors is most likely to affect the extent of the documentation of the auditor's understanding of a client's system of internal controls?

• A)The industry and the business and regulatory environments in which the client operates.
• B)The degree to which information technology is used in the accounting function.
• C)The relationship between management, the board of directors, and external stakeholders.
• D)The degree to which the auditor intends to use internal audit personnel to perform substantive tests.

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Definitions:

Debt Financing

Raising capital through borrowing money that must be repaid over time, typically with interest.

Startup Company

A newly established business, often in the tech or innovation sectors, that aims to meet a marketplace need by developing a viable business model around a product, service, platform, or idea.

Commercial Finance Companies

Financial institutions that provide loans to businesses using accounts receivable, inventory, equipment, and property as collateral.

Assets

Economic resources or valuable items that an individual, corporation, or country owns or controls with the expectation that it will provide future benefits.