When the Auditor Considers Whether He Understands the Form and Substance

question 152

Multiple Choice

When the auditor considers whether he understands the form and substance of the transaction or event,and whether the relevant authoritative literature has been applied consistently by the client,he is performing which step in the professional judgment process?

• A)identifying and defining the issue
• B)performing the analysis and identifying potential alternatives
• C)making the decision
• D)gathering the facts

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Definitions:

Fraudulent Use

The illegal or deceitful use of something, often for personal gain, that results in harm or loss to another party.

Bank's Responsibility

The obligations of a bank to its customers, including safeguarding deposits, processing transactions accurately, and maintaining confidentiality of client information.

Demand

An economic principle referring to a consumer's desire and willingness to pay a price for a specific good or service.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with transferability rights.