Using the Risk-Based Auditing Approach,when the Auditor Identifies a Control

question 81

Multiple Choice

Using the risk-based auditing approach,when the auditor identifies a control deficiency,the auditor should inquire about

• A)tests of controls.
• B)the feasibility of a systems review.
• C)materiality and inherent risk factors.
• D)compensating controls.

---

Definitions:

Fractional Reserve Banking

A banking system where banks hold only a fraction of the deposits as reserves, using the remainder for loans and advances.

Federal Reserve

The central banking system of the United States, which oversees the country's monetary policy, regulates banks, maintains financial stability, and provides financial services to the government.

Bank Failures

Occurrences where banks are unable to meet their obligations to depositors or become insolvent, often leading to a loss of public confidence and financial instability.

Federal Reserve Governors

Federal Reserve Governors are members of the Board of Governors of the Federal Reserve System, which oversees the United States' central banking system.