Much of the Information Regarding Material Misstatement in the Company

question 44

Multiple Choice

Much of the information regarding material misstatement in the company is obtained from management.However,the auditor may find it useful to talk to employees at different levels of authority such as

• A)individuals charged with department governance
• B)internal department personnel who perform internal controls
• C)in-house legal counsel regarding the risk of litigation
• D)employees in the shipping or receiving department

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Definitions:

Damages

Financial compensation ordered by a court to be paid to a person who has suffered loss or harm due to the unlawful act or negligence of another.

Condition Precedent

A legal term for a condition that must be fulfilled before a party is required to perform a contractual obligation.

Perform

To carry out a task or to execute an action, especially in accordance with requirements or expectations.

Contract Formation

The process by which parties reach a mutual understanding and agreement that is legally enforceable.