An Auditor's Examination Performed in Accordance with Australian Auditing Standard

question 70

Multiple Choice

An auditor's examination performed in accordance with Australian auditing standard ASA 240 generally should:

• A) guarantee that illegal acts will be detected.
• B) ensure a review of conditions and events that increase the risk of irregularity.
• C) encompass a plan to search actively for illegalities which relate to environmental reporting.
• D) be relied upon to disclose violations of client confidentiality.

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Definitions:

Production Rules

A hypothesized mental representation of procedural memory that specifies a goal to be achieved, one or more conditions that must be true in order for the rule to be applied, and one or more actions that result from the application of the rule.

Typicality Effect

The phenomenon whereby experimental participants are faster to respond to typical instances of a concept (e.g., robin for the concept “bird”) than to atypical instances (e.g., penguin for the concept “bird”).

Cognitive Economy

A principle of hierarchical semantic networks such that properties and facts about a node are stored at the highest level possible. For example, the fact “is alive” would be stored with the node for “animal” rather than stored with each node under animal such as “dog” and “cat.”

Encoding Specificity

A principle of retrieval asserted by Tulving. At the time material is first put into long-term memory, it is encoded in a particular way, depending on the context present at the time. At the time of recall, the person is at a great advantage if the same contextually supplied information available at encoding is once again available.