Auditors Test the Operating Effectiveness of Internal Controls Only If

question 25

Multiple Choice

Auditors test the operating effectiveness of internal controls only if they

• A) are effectively designed to prevent or detect material misstatements.
• B) address multiple risk factors.
• C) are applied in conjunction with other controls to address a single risk factor.
• D) cause susceptibility to material misstatements.

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Definitions:

Holistic

Approaching something as a whole, considering all factors and how they interconnect rather than focusing on individual components.

Freudian Theory

A psychological theory developed by Sigmund Freud that emphasizes the importance of unconscious processes and childhood experiences in shaping personality.

Id

In psychoanalytic theory, the part of the personality responsible for basic drives and impulses.

Ego

In psychology, represents the part of the human psyche that processes experiences and operates as a mediator between the conscious and unconscious minds.