When a Client Company's Systems Rely Heavily on IT, Auditors

question 44

Multiple Choice

When a client company's systems rely heavily on IT, auditors will be concerned with the possibility that:

• A) unauthorized program changes could result in a system that uniformly processes data in an unauthorized manner.
• B) embedded controls are likely to be circumvented.
• C) risk of material misstatement is likely to increase as the complexity of the client's IT system increases.
• D) specialized IT knowledge on the audit engagement team is not necessary unless the client company engages in electronic commerce.

Comprehend the construction and significance of economic models and their use in simplifying real-world complexities.

Understand the principles of the production possibility frontier (PPF) and its implications for resource allocation and efficiency.

Identify the conditions under which economic models can predict future outcomes or explain past phenomena.

Recognize the limitations and potential inaccuracies of economic models, especially when based on faulty assumptions.

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