Which of the Following Circumstances Most Likely Would Cause an Auditor

question 158

Multiple Choice

Which of the following circumstances most likely would cause an auditor to consider whether material misstatements exist in an entity's financial statements?

• A) Supporting records that should be readily available are frequently not produced when requested.
• B) Significant deficiencies in internal control previously communicated have not been corrected.
• C) Clerical errors are listed on a monthly computer-generated exception report.
• D) Differences are discovered during the client's annual physical inventory count.

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Definitions:

4WD Vehicles

Vehicles equipped with a four-wheel-drive system that can provide power to all four wheels simultaneously, offering better traction in off-road or adverse conditions.

Transaxle

A single mechanical device that combines the functions of an automobile's transmission, axle, and differential into one integrated unit, commonly found in front-wheel-drive vehicles.

Front-Wheel Drive

A vehicle configuration where the engine's power is transmitted to the front wheels, providing propulsion.

RWD Configuration

A vehicle drivetrain layout where the rear wheels receive power from the engine, offering benefits in handling and traction under certain conditions.