34. 35. 36. 37. In allocating financial statement materiality to the various accounts, the auditor should consider: a. the likelihood of misstatements in the account. b. the probable cost of verifying the account. c. neither the likelihood of misstatements in the account nor the probable cost of verifying the account. d. both the likelihood of misstatements in the account and the probable cost of verifying the account. e. the likelihood of misstatements in a transaction Which of the following is not one of the factors that make up the control environment? a. accounting personnel b. board of directors and audit committee c. organizational structure d. human resource policies and practices e. assignment of authority and responsibility In order to emphasize the importance of integrity and ethical values among all personnel or an organization, the CEO and other top managers should do all of the following except: a. set the tone by example. b. communicate to all employees. c. send email messages to all employees promoting ethical values. d. reduce or eliminate incentives and temptations. e. provide moral guidance to employees. Which of the following is not one of the characteristics of management's philosophy and operating style? a. approach to taking and monitoring business risks b. monitoring policies for developing and modifying accounting systems c. conscientiousness and conservatism in developing accounting estimates d. its attitudes and actions toward financial reporting e. its attitudes toward information processing and accounting functions and personnel