Rosie Is the External Auditor of Texas Two Steps, a Privately-Owned

question 63

Multiple Choice

Rosie is the external auditor of Texas Two Steps, a privately-owned dance company in Texas. Rosie believes the owner of the company is skimming cash off the top. She approaches the owner who explains that the money will be replaced in the following month after he refinances his house. Rosie accepts the owner's explanation but reclassifies the expenditure as a receivable of the company from the owner. Rosie's reasoning best reflects:

• A) Stage 1
• B) Stage 2
• C) Stage 3
• D) Stage 4

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Definitions:

Diffusion of Responsibility

A phenomenon where individuals are less likely to take action or feel responsible in the presence of a large group of people.

Prosocial Behaviour

Voluntary behavior intended to benefit another, such as helping, sharing, or providing comfort, which is motivated by empathy, moral principles, or a desire for social approval.

Mob Violence

Acts of aggression and violence carried out by a large group of people acting together.

Bystander Effect

The bystander effect is a social psychological phenomenon where individuals are less likely to offer help to a victim when other people are present.