You Are Performing the Audit of Internal Control for Clifton

question 84

Multiple Choice

You are performing the audit of internal control for Clifton Company. Which of the following would represent a material weakness in internal control?

• A) The company's audit committee has experienced unusual turnover of members.
• B) The company's CFO was indicted for embezzling from the company.
• C) Bank reconciliations are done monthly.
• D) The CEO was forced to resign due to an inappropriate relationship with an outside vendor.

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Definitions:

Cournot Output Choice

A model in economic theory where firms choose their output levels assuming competitors' outputs are fixed, aiming to maximize their own profit.

Pure Strategy Equilibrium

A concept in game theory where each player's chosen strategy provides the best outcome, given the strategies chosen by other players.

Nash Equilibrium

A situation in a strategic game where each player has chosen a strategy and no player can benefit by changing strategies while the other players keep theirs unchanged.

Mixed Strategy

A game theory strategy where a player chooses between all possible actions at specified probabilities.