An Auditor's Risk Assessment Is Based on the Assumption That

question 655

Multiple Choice

An auditor's risk assessment is based on the assumption that controls are operating effectively. Which of the following was not a step in making this assessment?

• A) Evaluate the effectiveness of the internal controls with tests of controls.
• B) Obtain an understanding of the entity's accounting system and control environment.
• C) Perform tests of details of transactions to detect material misstatements in the financial statements.
• D) Consider whether control activities can have a pervasive effect on financial statement assertions.

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Definitions:

Cognitive Therapy

A form of psychotherapy that emphasizes the role of thought patterns and beliefs in influencing behavior and emotions, aiming to change negative or irrational thoughts.

Aaron Beck

A psychiatrist and psychotherapist known for developing cognitive therapy, which is widely used to treat depression and other psychological disorders.

Salvador Minuchin

A renowned psychiatrist and psychotherapist known for his work in developing the field of family therapy, particularly structural family therapy.

Unconscious Motives

Drives and desires that reside in the unconscious mind, influencing behavior without the individual's awareness.