In Connection with the Examination of Financial Statements, an Independent

question 32

Multiple Choice

In connection with the examination of financial statements, an independent auditor could be responsible for failure to detect a material fraud if:

• A) the auditor planned the work in a hasty and inefficient manner.
• B) the auditor performing important parts of the work failed to discover a close relationship between the treasurer and the cashier.
• C) statistical sampling techniques were not used on the audit engagement.
• D) the fraud was perpetrated by one trusted client employee, who circumvented the existing internal controls.

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Definitions:

Driving Force

An element or factor that propels or motivates individuals or groups towards a particular direction or goal.

Restrictive Force

Factors or influences that limit capabilities, freedoms, or the scope of action.

T-Groups

Training groups designed to help participants improve interpersonal skills, group dynamics, and self-awareness through unstructured group interaction.

Process Consultation

A method used by consultants to help an organization improve its internal processes and dynamics through participatory methods.