What Does the Underlying Assumption of Reasonable Assurance Regarding Implementation

question 5

Multiple Choice

What does the underlying assumption of reasonable assurance regarding implementation of internal control mean?

• A)Auditor's are reasonably assured that fraud has not occurred in the period.
• B)Auditor's are reasonably assured that employee carelessness can weaken an internal control structure.
• C)Implementation of the control procedure should not have a significant adverse effect on efficiency or profitability.
• D)Management assertions about control effectiveness should provide auditors with reasonable assurance.

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Definitions:

Exposed

Being subject to something or made vulnerable to its effects.

Groupthink

A phenomenon where the desire for harmony or conformity in a group leads to irrational or dysfunctional decision-making outcomes.

Illusion of Invulnerability

A cognitive bias in which a person or group overestimates their immunity from harm or negative outcomes, often leading to risk-taking behaviors.

Illusion of Unanimity

The perception that everyone agrees within a group when in fact some members may disagree but are reluctant to voice their dissent.