An Important Consideration in Assessing Inherent Risk for Purchase Transactions

question 11

Multiple Choice

An important consideration in assessing inherent risk for purchase transactions is any motivation management may have to misstate expenditure. Which of the following is not a factor that may contribute to misstatement?

• A) the need to achieve announced profitability targets.
• B) the need to disclose concern over control problems.
• C) temptations for employees to make unauthorized purchases.
• D) temptations for employees to misappropriate purchased assets.

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Definitions:

Culturally Relevant

Pertaining to or effectively engaging with the cultural context, values, practices, and learning styles of the individuals or communities involved.

African-Americans

A demographic group in the United States with ancestry from any of the black racial groups of Africa.

Projective Test

A psychological assessment tool in which a standardized set of ambiguous stimuli is presented to individuals with the aim of eliciting responses that reflect their unconscious desires, fears, and struggles.

Collectivist View

A perspective that emphasizes the priority of group goals over individual goals and the importance of cohesion within social groups.