The Working Papers Contain Data Useful for Evaluating the Adequacy

question 70

Multiple Choice

The working papers contain data useful for evaluating the adequacy of the audit scope and the fairness of the financial statements. This data helps the auditor to conclude whether

• A) control risks were accurately identified and tested.
• B) inherent risks were set as low as possible.
• C) an unqualified audit report can be issued.
• D) the current files properly contain copies of client contracts and agreements.

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Definitions:

Intuitive Thought

A cognitive process that creates immediate understanding or knowledge without evident rational thought and inference.

Concrete Reasoning

A form of thinking that is focused on the physical and the now, dealing primarily with observable or tangible facts rather than abstract concepts.

Analytic Thought

A cognitive process that involves breaking down complex information or concepts into smaller, more manageable parts for examination and evaluation.

Logical Thinking

The process of using a rational, systematic series of steps to come to conclusions.