To Understand the Relevant Internal Controls of the Company,the Auditor

question 79

Multiple Choice

To understand the relevant internal controls of the company,the auditor should understand the following areas of the company:

• A)the control environment
• B)the auditor's risk assessment process
• C)the information system including the business processes relevant for internal control
• D)how the company communicates internal control roles and responsibilities
• E)how the company has responded to risks arising from IT
• F)both A and B
• G)both A and C
• H)Both A and E

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Definitions:

Production Possibilities Curve

A graph that shows the maximum number of possible units of two commodities that a economy can produce with available resources and technology.

Marginal Benefit

The incremental gain in happiness or usefulness obtained through consuming an extra unit of a good or service.

Marginal Cost

Marginal cost is the cost incurred by producing one additional unit of a product or service, emphasizing the concept of variable costing.

Resource Allocation

The process of allocating resources, including capital, labor, and materials, among competing uses or projects in an efficient manner.