Which of the Following Matters Would an Auditor Most Likely

question 6

Multiple Choice

Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee?

• A)Management's failure to renegotiate unfavorable long-term purchase commitments.
• B)Recurring operating losses that may indicate going concern problems.
• C)Evidence of a lack of objectivity by those responsible for accounting decisions.
• D)Management's current plans to reduce its ownership equity in the entity.

Understand how changes in operating hours or shifts affect productivity.

Comprehend the influence of technological and management changes on productivity.

Identify major contributors to productivity increase.

Comprehend the ethical and social challenges facing operations managers.

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Definitions:

Attitude Polarization

The phenomenon whereby a person's stance on a specific issue becomes more extreme after being exposed to opposing arguments.

Effort Justification

A cognitive dissonance theory concept where individuals rationalize the effort they put into achieving a goal, often valuing the outcome more if more effort was required.

Self-fulfilling Prophecy

A prediction that directly or indirectly causes itself to become true due to positive feedback between belief and behavior.

False Consensus Effect

The cognitive bias to overestimate the extent to which others share our beliefs, attitudes, and behaviors.