Which of the Following Would Result in an Adverse Report

question 51

Multiple Choice

Which of the following would result in an adverse report issued by an auditor on an audit of internal control?

• A)The control risk is assessed at a lower level.
• B)The tests of controls support the documented understanding of controls.
• C)There is a material weakness in the design or operation of controls.
• D)A confirmation is not returned by a customer in a timely manner.

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Definitions:

Non-current Assets

Non-current assets are long-term resources owned by a company, expected to provide economic benefits beyond one year, such as property, plant, and equipment (PP&E), and intangible assets.

Direct Method

A cash flow statement presentation that lists major categories of gross cash receipts and payments.

Cost of Goods Sold

The direct expenses tied to the production of goods sold by a company, including material, labor, and overhead costs, directly affecting gross profit.

Accounts Payable

A liability representing an amount owed by an entity to its creditors/suppliers for goods and services purchased on credit.