In Reporting on Compliance with Laws and Regulations During a Financial

question 8

Multiple Choice

In reporting on compliance with laws and regulations during a financial statement audit in accordance with Government Auditing Standards, an auditor should include in the auditor's report:

• A) A statement of assurance that all controls over fraud and illegal acts were tested.
• B) Material instances of fraud and illegal acts that were discovered.
• C) The materiality criteria used by the auditor in considering whether instances of noncompliance were significant.
• D) An opinion on whether compliance with laws and regulations affected the entity's goals and objectives.

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Definitions:

Self-fulfilling Prophecy

When persons behave toward another person according to a label (impression) and cause the person to respond in ways that confirm the label.

Stereotype Threat

The suspicion a member of a group holds that he or she will be judged based on a common stereotype of the group.

Confirmation Bias

The tendency to focus on information relevant to a belief and ignoring or downplaying information that is inconsistent with that belief.

Anchoring and Adjustment

A cognitive bias where individuals rely too heavily on an initial piece of information (the "anchor") when making decisions, with adjustments made too conservatively.