Several General Premises Have Been Incorporated into the Audit Risk

question 15

Multiple Choice

Several general premises have been incorporated into the audit risk model.Which of the following general premises have not been incorporated into the model?

• A)Complex or unusual transactions are more likely to be recorded in error than are recurring or routine transactions.
• B)Good internal controls reduce the acceptable level of audit risk.
• C)The amount and persuasiveness of audit evidence gathered should vary inversely with audit risk.
• D)The better the organization's internal controls,the lower the likelihood of material misstatements.

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Definitions:

Ringelmann Effect

Describes the tendency for individual members of a group to become increasingly less productive as the size of the group increases.

TAT

The thematic apperception test, a projective psychological test used to reveal a person's social drives or needs by their interpretation of a series of pictures of emotionally ambiguous situations.

Social Loafing

The phenomenon where individuals exert less effort to achieve a goal when they work in a group than when they work alone.

Social Impact Theory

Social impact theory suggests that the amount of influence a person experiences in a group situation depends on the strength, immediacy, and number of other people in the group.