After Obtaining an Understanding of the Internal Control System and Assessing

question 24

Multiple Choice

After obtaining an understanding of the internal control system and assessing control risk,an auditor decided not to perform additional tests of controls.The auditor most likely concluded that ________.

• A)the additional evidence to support a further reduction in control risk was not cost-beneficial
• B)the assessed level of inherent risk exceeded the assessed level of control risk
• C)the internal control system was properly designed and justifiably may be relied on
• D)the evidence obtainable through tests of controls would not support an increased level of control risk

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Definitions:

Specific

Clearly defined or identified; particular and distinct.

LMX Theory

Leadership-Member Exchange, a theory positing that leaders develop different relationships with various subordinates, resulting in unique dyadic exchanges marked by varying degrees of mutual trust, respect, and obligation.

Affective Events

Describes events that provoke strong emotional reactions, which can significantly impact employee behavior and attitudes in the workplace.

Leader-follower Relationship

The dynamic interaction and connection between those in leadership positions and their followers, often defined by communication, influence, and mutual respect.