The Purpose of Alert No

question 167

Multiple Choice

The purpose of Alert No.10 from the PCAOB is to _______.

• A)remind auditors of the requirement to appropriately apply professional skepticism throughout the audit, as well as various judgments about certain situations
• B)present the new auditing standard
• C)present a listing of which registered accounting firms failed to exercise professional skepticism
• D)present a detailed report listing the client companies that need more scrutinizing by audit firms regarding fraud red flags

---

Definitions:

Achievement Test

A type of ability test that measures what one has learned. Types of achievement tests include survey battery tests, diagnostic tests, and readiness tests.

Percentiles

A measure that indicates the value below which a given percentage of observations in a group of observations falls.

Stanines

Derived from the term “standard nines,” this is a standardized score frequently used in schools. Often used with achievement tests, stanines have a mean of 5 and a standard deviation of 2, and range from 1 to 9.

T-scores

Standardized scores with a mean of 50 and a standard deviation of 10, used to compare an individual's score against a normative sample.