When the Auditor Is Obtaining an Understanding of the Independent

question 123

Multiple Choice

When the auditor is obtaining an understanding of the independent computer service center's internal controls, the auditor should

• A) use the same criteria used to evaluate the client's internal controls.
• B) use different criteria because the service center resides outside the company.
• C) use the same criteria used to evaluate the client's internal controls but omit tests of transactions.
• D) use different criteria for the service center by including substantive tests of balances.

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Definitions:

Grenville's Argument

a reference to the rationale used by British Prime Minister George Grenville to justify the imposing of taxes on the American colonies, arguing it was fair to have them contribute to the costs of their own defense.

Colonial Resistance

Opposition and acts of defiance by the American colonies against British rule, particularly leading up to and during the American Revolution.

Tax Increases

Governmental policy action that raises the amount of taxes on income, property, goods, or services, often to generate revenue for public projects or reduce deficits.

Business Interests

Activities or concerns that are primarily focused on the pursuit of profit and economic growth, often guiding corporate or individual investments and strategies.