Financial Statement Users Cannot Be Expected to Evaluate Audit Performance

question 19

Multiple Choice

Financial statement users cannot be expected to evaluate audit performance because they will not have the time or the competence to do so. In such a situation, how is public confidence in the quality of professional services enhanced? When there are

• A) only business majors hired to work as auditing students with public accounting firms.
• B) adequate controls at the public accounting firm to limit the amount of overtime worked.
• C) high standards of performance and conduct on the part of all practitioners.
• D) strict rules about the type of work that employees should complete on a daily basis.

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Definitions:

Complex and Distorted

Describes situations or information that are complicated and not presented in a clear, accurate manner.

Ethnocentric Intergroup Attribution

The tendency to attribute positive behaviors and outcomes to one's own group and negative behaviors and outcomes to other groups based on ethnic or cultural biases.

Actor-Observer Effect

This effect describes how an individual tends to attribute their own actions primarily to external factors, yet credits the actions of others to their inherent traits.

Tit-for-Tat Rule

A strategy in game theory and social interactions where an individual responds to an action with a similar action, reciprocating cooperation and retaliation.