If Management Makes Appropriate Adjustments,but Does Not Take Appropriate Steps

question 45

Multiple Choice

If management makes appropriate adjustments,but does not take appropriate steps to modify internal control in order to rectify the problem of fraud discovered in a financial statement audit,the decision has a direct impact on:

• A)the audit opinion on the financial statements.
• B)the client company's stock price.
• C)the auditor's perception of the overall control environment.
• D)all previous work performed by the auditor for competing companies.

---

Definitions:

Real Property

Land, and generally whatever is erected or growing on or affixed to the land, including buildings and crops.

Mortgagee

The lender or financial institution in a mortgage agreement, holding the mortgage as security for the loan.

Debtor

An individual or entity that owes a debt to another party, often in the context of financial obligations.

Real Estate

Assets that include land, the structures on that land, as well as the natural resources present.