In Evaluating Internal Control,the Auditor Is Basically Concerned That the System

question 77

Multiple Choice

In evaluating internal control,the auditor is basically concerned that the system provides reasonable assurance that

• A) Operational efficiency has been achieved in accordance with management plans.
• B) Errors and fraud have been prevented, or detected and corrected.
• C) Controls have not been circumvented by collusion.
• D) Management cannot override the system.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in a linear fashion.

Desired Rate

Typically refers to a target interest rate set by an individual or entity, often relating to the return on investment or loan interest rates they wish to achieve.

Average Rate of Return

A measure of the annual return on an investment, calculated by dividing the average annual profit by the initial investment cost.

Sensitivity Analysis

A technique used to determine how different values of an independent variable impact a particular dependent variable under a given set of assumptions.