Jones, CPA, Is Auditing the Financial Statements of XYZ Retailing

question 36

Multiple Choice

Jones, CPA, is auditing the financial statements of XYZ Retailing Inc. What assurance does Jones provide that direct effect noncompliance that is material to XYZ's financial statements, and noncompliance that has a material, but indirect effect on the financial statements will be detected?

• A)Direct effect noncompliance: Reasonable; Indirect effect noncompliance: None.
• B)Direct effect noncompliance: Reasonable; Indirect effect noncompliance: Reasonable.
• C)Direct effect noncompliance: Limited; Indirect effect noncompliance: None.
• D)Direct effect noncompliance: Limited; Indirect effect noncompliance: Reasonable.

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Definitions:

Peahens

The female counterparts of peacocks, distinguished by their lack of the colorful tail feathers exhibited by males.

Eyespots

Distinctive markings on some animals, serving as a form of mimicry or camouflage.

Good Genes Hypothesis

A theory in evolutionary biology suggesting that individuals with favorable genetic traits are more attractive to the opposite sex because those traits are associated with better health or greater survivability.

Opportunity for Selection

The potential for natural selection to act on a population, often quantified by the variance in reproductive success among individuals.