Auditors Test the Operating Effectiveness of Those Controls That Are

question 62

True/False

Auditors test the operating effectiveness of those controls that are intended to prevent and detect material misstatements.

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Definitions:

Authentic

Genuine, original, and not a copy or imitation; true and accurate.

Consideration

Something of value that is exchanged between parties in a contract, making the agreement legally binding.

Personal Defense

A defense that can be used to avoid payment to an ordinary holder of a negotiable instrument but not a holder in due course (HDC) or a holder with the rights of an HDC. Personal defenses are also called limited defenses.

HDC

Stands for Holder in Due Course, referring to a party that has acquired a negotiable instrument for value, in good faith, and without notice of any defects.