Which of the Following Circumstances Most Likely Would Cause an Auditor

question 851

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) Management places little emphasis on meeting earnings projections. net
• B) The board of directors makes all major financing decisions.
• C) Significant deficiencies in internal control previously communicated to management are not corrected.
• D) Transactions selected for testing are not supported by proper documentation.

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Definitions:

Disequilibrium

A state of imbalance or instability in a system or market, often temporary, where supply and demand do not match.

Job Tenure

The length of time an individual remains employed in a particular job or with a single employer, often associated with job satisfaction and career progression.

Satisfaction

The feeling of fulfillment or pleasure arising from the attainment of one's goals or desires.

Celerity

Speed with which an individual initiates interaction with his or her environment