An Auditor Has Been Engaged to Report on Management's Report

question 49

Multiple Choice

An auditor has been engaged to report on management's report on internal control.Management's report points to a material weakness in its system of internal controls over inventory.The auditor's report should be a(n) ________.

• A)adverse opinion
• B)qualified opinion for a GAAP departure
• C)clean opinion
• D)clean opinion with an emphasis of matter paragraph

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Definitions:

Peer Pressure

The influence exerted by a peer group, encouraging individuals to change their attitudes, values, or behaviors to conform to group norms.

Asch Experiment

A series of psychological experiments conducted by Solomon Asch studying if and how individuals yielded to or defied a majority group.

Groupthink

A phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Binge Drinking

The consumption of an excessive amount of alcohol in a short period, often defined as five or more drinks for men, and four or more for women, in about two hours.