Which of the Following Situations Represents a Risk Factor That

question 12

Multiple Choice

Which of the following situations represents a risk factor that relates to misstatements arising from misappropriation of assets?

• A)A high turnover of senior management.
• B)A lack of independent checks.
• C)A strained relationship between management and the predecessor auditor.
• D)An inability to generate cash flow from operations.

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Definitions:

Drive

An internal motivational state created by physiological or psychological needs.

Extrinsic Motivation

A form of motivation that drives individuals to perform tasks and engage in activities mainly because of external rewards or to avoid punishment.

Intrinsic Motivation

The drive to engage in an activity for its own sake, without the need for external reward or recognition.

External Reward

A reward that comes from outside the individual, often used as motivation for behavior, such as money, grades, praise, or awards.