In Order to Properly Plan and Perform an Audit, an Important

question 29

Multiple Choice

In order to properly plan and perform an audit, an important fact for both the auditor and the client to understand is that

• A) the internal control policies and procedures are developed by the auditors.
• B) the purpose of an audit is to prevent fraud.
• C) management is responsible for the preparation of the financial statements.
• D) management can restrict the auditor's access to important information relevant to the financial statements.

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Definitions:

Percentage Commission

A method of compensation where an employee or agent is paid a percentage of the sales they generate or the deals they close.

Intrinsic Rewards

The personal satisfaction and enjoyment derived from completing a task or achieving a goal, independent of external rewards or recognition.

Extrinsic Rewards

Rewards given to employees that are external to the job itself, such as pay, benefits, bonuses, and promotions, aimed at motivating employees' performance.

Internal Promotions

The practice of filling vacancies within an organization by promoting existing employees rather than hiring externally.