When the Results of Substantive Procedures Identify Misstatements, _______

question 61

Multiple Choice

When the results of substantive procedures identify misstatements, _______.

• A)the auditors refer the misstatements to the prior auditor for correction
• B)auditors consider whether the misstatements may be indicative of the need to re-evaluate inherent risk, control risk or fraud risk
• C)auditors consider whether the misstatements may be indicative of the need to re-evaluate inherent risk only
• D)auditors consider whether the misstatements may be indicative of the need to re-evaluate control risk only

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Definitions:

Source Monitoring

The process by which individuals determine the origins of memories, knowledge, or beliefs.

Reality Monitoring

The process of distinguishing between memories of actual events and those of imagined events.

Source-monitoring Error

A type of memory error where a person incorrectly attributes the source of their information or memories.

Reality-monitoring Error

A cognitive malfunction where an individual has difficulty distinguishing between what is real and what has been imagined or thought.