Which of the Following Is Not an Inherent Limitation in an Auditor's

question 120

Multiple Choice

Which of the following is not an inherent limitation in an auditor's ability to detect material misstatements relating to a client's compliance with laws and regulations?

• A)Laws and regulations often relate to operational issues within the entity that do not necessarily relate to the financial statements,so the information systems relating to financial reporting may not capture noncompliance.
• B)The legal implications of noncompliance are ultimately a matter for legal authorities to resolve,and are not a matter about which the auditor can resolve.
• C)Management may act to conceal noncompliance,or may override controls,or may intentionally misrepresent facts to the auditor.
• D)Auditors are not required to consider the applicable legal and regulatory frameworks that apply to the entity.

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Definitions:

Baddeley

A reference to Alan Baddeley, a psychologist best known for his work on the model of working memory.

Maintenance Rehearsal

A cognitive process involving the repetition of information to keep it within working memory or to store it in short-term memory.

Phone Number

A sequence of digits assigned to a telephone line for the purpose of making and receiving calls.

Selective Attention

The process of focusing on a specific aspect of information while disregarding other perceivable information.