Which of the Following Is a True Statement Regarding Documentation

question 217

Multiple Choice

Which of the following is a true statement regarding documentation requirements for analytical procedures?

• A) When an analytical procedure is used as the principal substantive test of a significant financial statement assertion, the auditor is required to document the reasons analytical procedures were performed instead of tests of details.
• B) When an analytical procedure is used as the principal substantive test of a significant financial statement assertion, the auditor is required to document his or her expectation and management's concurrence with that expectation.
• C) When an analytical procedure is used during the overall review stage of the audit, the auditor is required to document the auditor's expectation and any additional procedures performed to investigate significant unexplained differences.
• D) When an analytical procedure is used as the principal substantive test of a significant financial statement assertion, the auditor is required to document both the auditor's expectation and the factors considered in developing that expectation.

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Definitions:

Cultural Intuition

The ability to understand and appreciate the nuances of different cultures, often gained through experience or study.

Communication Style

The way in which individuals express themselves and interact with others, often influenced by cultural, personal, and situational factors.

Culture

The social behavior, norms, knowledge, beliefs, arts, laws, customs, and habits of the members of a society.

Cultural Competency

The capacity to comprehend, converse with, and efficiently engage with individuals from diverse cultural backgrounds.