When Auditors Are Performing Substantive Procedures and Identify Misstatements They

question 32

Multiple Choice

When auditors are performing substantive procedures and identify misstatements they did not expect, they _______.

• A)reconsider their audit strategy and audit plan, and determine if the nature, timing, or extent of internal control testing needs to be modified
• B)reconsider their audit strategy and audit plan, and determine if the nature, timing, or extent of substantive procedures need to be modified
• C)should seek to obtain written representations from management as to the accuracy of the balances in question
• D)should consider withdrawing from the engagement

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Definitions:

Combinations

Refers to the selection of items from a larger set where the order of selection does not matter.

Binomial Experiment

An experiment or trial that can be reduced to two outcomes, success or failure, and is repeated a fixed number of times.

Continuous Random Variables

Variables capable of assuming any value within a specified range, with the potential for infinite variations.

Binomial Distribution

A probability distribution that summarizes the likelihood that a variable will take one of two independent values under a given set of parameters or conditions.