There Are Four Conditions That Give Rise to the Need

question 49

Multiple Choice

There are four conditions that give rise to the need for independent audits of financial statements. One of these conditions is consequence. In this context, consequence means that the:

• A) users of the statements may not fully understand the consequences of their actions.
• B) auditor must anticipate all possible consequences of the report issued.
• C) impact of using different accounting methods may not be fully understood by the users of the statements.
• D) financial statements are used for important decisions.
• E) financial statements were prepared in accordance with GAAS.

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Definitions:

Conflict

A serious disagreement or argument, typically a protracted one, which can occur between individuals, groups, or nations.

Freud

The founding father of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Psychological Stress

A form of stress experienced when perceived demands exceed one's resources to cope, leading to various mental and physical health issues.

Approach-Avoidance Conflict

A conflict in which a choice must be made about whether to pursue a single goal that has both attractive and unattractive aspects.