The Initial Development of Auditing Standards Was in Response to

question 4

Multiple Choice

The initial development of auditing standards was in response to

• A)a scandal involving embezzlement that was not detected during an audit engagement.
• B)auditors' concerns that all components of the financial statements were not being verified.
• C)independent inquiries of the public accounting profession made by the SEC.
• D)requests by companies for greater assurance with respect to the auditors' ability to detect financial statement misstatements.

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Unanimity

Complete agreement or consensus among all members or parties involved in a particular situation or decision-making process.

Failed Decisions

Decisions that do not achieve their intended outcome, leading to negative consequences or failures to meet specific goals or objectives.

Misallocation

The inefficient or inappropriate distribution or use of resources in a manner that does not maximize efficiency or value.