The Auditor Observes Client Employees in Obtaining an Understanding of the Internal

question 51

Multiple Choice

The auditor observes client employees in obtaining an understanding of the internal control in order to:

• A)prepare a flowchart.
• B)update information contained in the organisation and procedure manuals.
• C)corroborate the information obtained during the initial phases of obtaining an understanding of the internal control.
• D)determine the extent of compliance with quality control standards.

---

Definitions:

Trade War

A situation where countries impose tariffs or other trade barriers against each other in response to disputes, which can lead to decreased international trade.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good or service and the actual price they pay.

Predatory Dumping

It involves temporarily reducing the price of goods in foreign markets to eliminate competition, with the intent to raise prices once competition has been reduced or eliminated.

Tariff

A tax imposed on imported goods and services, which can affect trade between countries by increasing the cost of imported goods.