If an Auditor Determines That a Client Company's Internal Controls

question 56

Multiple Choice

If an auditor determines that a client company's internal controls are producing reliable and complete financial information, the auditor will rely upon the internal control system and:

• A) reduce the extent of controls testing in the interim phase of the financial statement audit.
• B) reduce the planned substantive testing during the financial statement audit.
• C) increase the amount of evidence collected during the financial statement audit.
• D) increase the planned substantive testing during the financial statement audit.

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Definitions:

Social Position

The rank or status of an individual or group within the social hierarchy, defined by factors like wealth, occupation, or education.

Homeostasis

The self-regulating process by which biological systems maintain stability while adjusting to conditions optimal for survival.

Equilibrium

A state of balance or stability within a system, where all forces or influences are equally counteracted by others.

Boundaries

Limitations or borders that define acceptable behavior and help maintain personal integrity and interpersonal relationships.