In Trying to Determine Whether There Is a Need for Additional

question 39

Multiple Choice

In trying to determine whether there is a need for additional detailed tests of controls, which of the following factors are considered?

• A) evidence provided by other tests
• B) changes in the overall control environment
• C) results of enquiries and observations
• D) all of the above

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Definitions:

Face Value

The face value or monetary amount displayed on a bond, note, or any financial document, indicating the total due upon its maturity.

Operating Lease

A lease agreement allowing a business to use an asset without ownership, often with lower payments and shorter terms than a finance lease.

Capital Lease

A lease agreement that is classified as a purchase by the lessee due to its terms closely mirroring the acquisition of an asset.

Preferred Stock

Preferred stock represents a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often receiving dividends before common shareholders.