Which of the Following Statements Describes Why a Properly Designed

question 1022

Multiple Choice

Which of the following statements describes why a properly designed and executed audit may not detect a material misstatement due to fraud?

• A) Audit procedures that are effective for detecting an unintentional misstatement may be ineffective for an intentional misstatement that is concealed through collusion.
• B) An audit is designed to provide reasonable assurance of detecting material errors, but there is no similar responsibility concerning material misstatement due to fraud.
• C) The factors considered in assessing control risk indicated an increased risk of intentional misstatements, but only a low risk of unintentional errors in the financial statements.
• D) The auditor didn't consider factors influencing audit risk for account balances that have effects pervasive to financial statements taken whole.

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Definitions:

Drive-On Type

Refers to equipment or mechanisms that are engaged or activated by driving onto or over them, often seen in automotive service equipment.

Four-Post Design

A type of lift or rack in automotive repair shops or garages featuring four posts that provide stability and support for a vehicle during maintenance or inspections.

VIN Number

The Vehicle Identification Number, a unique code used to identify individual motor vehicles.

Country of Origin

The country where a product was manufactured or produced, often used in trading and customs for determining tariffs and indicating quality.