When Management Has an Adequate Level of Integrity for the Auditor

question 8

Multiple Choice

When management has an adequate level of integrity for the auditor to accept the engagement but cannot be regarded as completely honest in all dealings, auditors normally

• A) reduce acceptable audit risk and increase inherent risk.
• B) reduce inherent risk and control risk.
• C) increase inherent risk and control risk.
• D) increase acceptable audit risk and reduce inherent risk.

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Definitions:

Bruit

A sound, usually abnormal, heard in auscultation that indicates the presence of turbulent flow within a blood vessel.

Auscultation

The act of listening to sounds within the body, typically using a stethoscope, as a method of diagnosing diseases or conditions.

Murmur

A sound, typically an abnormal one, heard in the heartbeat due to turbulent blood flow within the heart.

Capillaries

The smallest blood vessels in the body, connecting arterioles and venules, and facilitating the exchange of water, oxygen, carbon dioxide, and many other nutrients and waste substances between blood and surrounding tissues.