The going concern assumption means financial statements are prepared on the basis that the organization will continue operating for the foreseeable future and will not be forced to liquidate or significantly curtail operations. The note described in the question directly reflects this assumption. The monetary unit assumption means transactions are measured in a stable currency. The time period assumption means financial performance is reported over defined accounting periods. The economic entity assumption means the organization's activities are separate from those of owners or other entities. Internal auditors reviewing financial reporting should understand going concern because it affects asset valuation, liability classification, disclosure, impairment analysis, and audit risk. Therefore, Option B is correct.

Under Herzberg's Two-Factor Theory, compensation is a hygiene factor. Competitive compensation can reduce dissatisfaction, but it does not necessarily create high motivation or superior achievement. True motivators include recognition, achievement, responsibility, advancement, and growth. Option A supports growth and is more likely to motivate. Option B provides recognition, which is also a motivator. Option D gives responsibility to successful employees, another motivational factor. Internal audit leaders should understand motivation theory when evaluating culture, performance management, employee engagement, and incentive systems. A compensation package may prevent dissatisfaction with pay fairness, but high performance normally requires meaningful work, recognition, responsibility, and development. Therefore, Option C is correct.

Understanding the Accounting for Office Supplies:
The organization maintains an account for office supplies on hand, which represents unused office supplies at any given time.
The expense recorded during the year represents the cost of office supplies purchased.
At year-end, the adjusting entry is made to reflect the actual amount of supplies on hand and adjust the supplies expense accordingly.
Formula to Determine the Supplies Used:
Supplies Used=Beginning Balance+Purchases#Ending Balance\text{Supplies Used} = \text{Beginning Balance} + \text{Purchases} - \text{Ending Balance} Supplies Used=Beginning Balance+Purchases#Ending Balance Plugging in the given values:
Supplies Used=9,000+45,000#11,500=42,500\text{Supplies Used} = 9,000 + 45,000 - 11,500 = 42,500 Supplies Used=9,000+45,000#11,500=42,500 This amount ($42,500) represents the actual office supplies used and should be recorded as an expense.
The adjusting entry would include:
A debit to Office Supplies on Hand for $42,500
A credit to Office Supplies Expense for $42,500
Why Other Options Are Incorrect:
A). A debit to office supplies on hand for $2,500 - Incorrect, as this figure does not represent supplies used or purchased.
B). A debit to office supplies on hand for $11,500 - Incorrect, as this is the ending balance and not the adjustment amount.
C). A debit to office supplies on hand for $20,500 - Incorrect, as this does not align with the formula for calculating used supplies.
IIA's Perspective on Financial Reporting and Adjusting Entries:
IIA Standard 1220 - Due Professional Care emphasizes accurate financial reporting and proper adjustments for year-end entries.
GAAP Accounting Principles require accrual-based adjustments to ensure that expenses are recognized in the period they are incurred.
COSO Internal Control Framework supports proper inventory and expense adjustments to avoid misstated financials.
IIA References:
IIA Standard 1220 - Due Professional Care (Financial Reporting Accuracy) GAAP Accounting Standards - Adjusting Entries for Supplies and Inventory COSO Internal Control - Accurate Expense Recognition Thus, the correct and verified answer is D. A debit to office supplies on hand for $42,500.

The Internet of Things connects sensors, machines, devices, and systems so operational data can be captured and transmitted continuously. In a manufacturing plant, the primary benefit is real-time monitoring of production equipment, output, temperature, vibration, downtime, quality indicators, and maintenance conditions. This allows management to detect production issues quickly, reduce downtime, improve preventive maintenance, and optimize throughput. IoT may introduce cybersecurity and data-integrity concerns, but securing sensitive data and detecting cyberattacks are not its main production-process benefit.
Data integrity also requires additional controls over devices, transmission, storage, and analytics. Internal auditors should evaluate IoT governance, access control, device security, monitoring, and operational reliance. Therefore, Option A is correct.

The annual depreciation is ($320,000 # $40,000) ÷ 4 = $70,000. Annual savings after tax are $150,000 × 70%
= $105,000. The depreciation tax shield is $70,000 × 30% = $21,000. Therefore, annual after-tax cash flow is
$126,000. The sum of the present value factors is 0.87 + 0.76 + 0.66 + 0.57 = 2.86. Present value of annual cash flows is $126,000 × 2.86 = $360,360. The residual value present value is $40,000 × 0.57 = $22,800.
Total present value is $383,160. Less the initial $320,000 investment, net present value is $63,160. Therefore, Option B is correct.