The Auditor Should Be Alert to the Risk of Material

question 22

True/False

The auditor should be alert to the risk of material misstatements when cash flows from operations are negative and net income (rather than loss) is reported.

---

Definitions:

Concepts

General ideas or understandings that can be used to group together objects, events, qualities, or abstractions that are similar in some way.

Mental Processing

The operations performed by the brain to receive, perceive, store, and retrieve information.

Conscious

Conscious refers to the awareness of the self, one's thoughts, feelings, and environment at any given time.

Strong Feelings

Intense emotional responses, which can range from joy, love, and excitement to anger, fear, and sadness.