An Auditor Should Recognise That the Application of Auditing Procedures

question 9

Multiple Choice

An auditor should recognise that the application of auditing procedures may produce evidential matter indicating the possibility of errors or fraud; therefore, an auditor should:

• A) extend the work to audit most recorded transactions and records of an entity.
• B) design audit tests to detect unrecorded transactions.
• C) not depend on internal accounting control features that are designed to prevent or detect errors or irregularities.
• D) plan and perform the engagement with an attitude of professional scepticism.

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Definitions:

Unjust Enrichment

A legal principle that occurs when one person is unfairly enriched at the expense of another, and the law demands restitution to the aggrieved party.

Executory Contract

A contract under which both parties have not yet fully performed their contractual obligations.

Genuine Contracts

Contracts that are legally binding and enforceable, characterized by mutual assent, consideration, capacity, and legality.

Implied in Fact Contracts

Contracts arising from the conduct of the parties, indicating a mutual intention to contract, without explicit verbal agreement.