After Obtaining an Understanding of an Entity's Internal Control System

question 39

Multiple Choice

After obtaining an understanding of an entity's internal control system, an auditor may assess control risk at a high level for some account balances because he or she:

• A)identifies internal controls that are likely to prevent material misstatements.
• B)performs tests of controls to reduce detection risk to an acceptable level.
• C)determines that the pertinent internal control components are not well documented.
• D)believes the internal controls are unlikely to be operating effectively.

---

Definitions:

Participatory Commerce

A retail concept where customers have a role in the production or selling process, elevating traditional shopping to interactive engagement.

Social Commerce

An e-commerce approach that involves selling products directly through social media networks or incorporating social interaction and user contributions to facilitate online buying and selling.

Acknowledge Opinions

The act of recognizing and considering the views and feelings of others, often used in the context of social media interactions and customer feedback.

Herding Effect

A behavioral phenomenon where individuals in a group tend to act collectively without coordinated direction, often seen in financial markets, consumer behavior, or social trends.