When Planning an Audit of Internal Controls for an Issuer,the

question 28

Multiple Choice

When planning an audit of internal controls for an issuer,the audit team should

• A) Identify significant accounts, locations, and assertions.
• B) Conduct a walkthrough of the internal control process.
• C) Make inquiries of employees regarding the existence of control activities.
• D) Reperform control activities performed by client employees to determine their effectiveness.

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Definitions:

Signal-Detection Theory

The theory that perceiving or not perceiving a stimulus is actually a judgment about whether a momentary sensory experience is due to background noise alone or to the background noise plus a signal.

Classical Psychophysical

Relates to the traditional study of the relationships between physical stimuli and the sensations and perceptions they produce.

Sensitivity

The capacity to perceive, feel, or be aware of stimuli or changes in the environment; can also refer to the degree of responsiveness to social or emotional matters.

Weber Fraction

A principle that quantifies the perception of change in a given stimulus, stating that the just noticeable difference is a constant proportion of the original stimulus’s intensity.