Identify the Activity Below That the External Auditor Should Not

question 87

Multiple Choice

Identify the activity below that the external auditor should not be involved.

• A) examining system access logs
• B) developing the information system
• C) examining logical access policies and procedures
• D) making recommendations to management for improvement of existing internal controls

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Definitions:

Short 100 Shares

The action of selling 100 shares of stock that one does not own, betting that the stock's price will decline and it can be repurchased at a lower price for a profit.

Market Price

The current price at which an asset or service can be bought or sold in the market.

Short Transactions

Financial activities where securities are borrowed and sold with the expectation to buy them back at a lower price for a profit, betting on declining market prices.

Street Name

A practice where securities are held in the brokerage firm's name on behalf of a client, facilitating easier trade execution and maintenance.