In Addition to Direct Impacts on the Financial Statements,the Auditor

question 45

Multiple Choice

In addition to direct impacts on the financial statements,the auditor also needs to consider indirect effects.An assessment of client objectives and strategies can reveal issues that could lower income or cause contingent liabilities.Which of the following could cause lost sales,increases in warranty expenses,and product liability claims?

• A)poor product quality
• B)excessive advertising
• C)ineffective projections
• D)inaccurate budgets

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Definitions:

Developmental

Relating to the systematic changes and continuities in the individual that occur between conception and death, including physical, cognitive, and social-emotional growth.

Fundamental

Relating to the most basic, essential or central aspects of something.

Luthans And Avolio's

Refers to researchers Fred Luthans and Bruce J. Avolio, known for their work in positive organizational behavior and authentic leadership.

Compassion

A deep awareness of and sympathy for another's suffering, combined with a desire to alleviate that suffering.