When Auditing Financial Statements of a Private Company, the Minimum

question 7

Multiple Choice

When auditing financial statements of a private company, the minimum work an auditor must perform in connection with a company's internal control is best described by which of the following statements?

• A)Perform exhaustive tests of accounting controls and evaluate the company's control system effectiveness.
• B)Determine whether the company's control policies are designed well enough to prevent material misstatements.
• C)Prepare auditing working papers that document the auditor's understanding of the company's internal control.
• D)Design procedures to search for significant deficiencies in the actual operation of the company's internal control.

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Definitions:

Classical Psychoanalysts

refer to psychoanalysts who adhere to the original principles and methods of psychoanalysis developed by Sigmund Freud, focusing on unconscious motivations and childhood experiences.

Maladaptive Behaviors

Behaviors or actions that inhibit a person’s ability to adjust healthily to particular situations.

Psychodynamic Therapy

Therapy deriving from the psychoanalytic tradition that views individuals as responding to unconscious forces and childhood experiences, and that seeks to enhance self-insight.

Traditional Psychoanalysis

A therapeutic technique developed by Freud that aims to explore unconscious desires and conflicts through free association, dreams, and transferences.