If an Auditor Decidthat a Client Has Internal Controls That

question 18

Multiple Choice

If an auditor decidthat a client has internal controls that can reduce the likelihood of a) material misstatement for an identified risk, the auditor will:

• A) test those controls.
• B) qualify the audit report.
• C) adopt a predominantly substantive approach.
• D) not test those controls.

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Definitions:

U.S. Goods

Products and services that are produced in the United States.

Dollar

The official currency of the United States, also used as a standard monetary unit in international transactions.

Long-Run Aggregate Supply Curve

A graphical representation showing the relationship between the price level and the quantity of output that can be produced in the economy in the long run, assuming all resources are fully employed.

Capital Stock

The total representation of a company's or country's machinery, buildings, and other physical assets used in production.