An Auditor Should Recognize That the Application of Auditing Procedures

question 5

Multiple Choice

An auditor should recognize that the application of auditing procedures may produce evidence indicating the possibility of errors or fraud and therefore should:

• A)plan and perform the engagement with an attitude of professional skepticism.
• B)not rely on internal controls that are designed to prevent or detect errors or fraud.
• C)design audit tests to detect unrecorded transactions.
• D)extend the work to audit the majority of the recorded transactions and records of an entity.

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Definitions:

Utility

In economics, the satisfaction or pleasure that consumers derive from consuming goods or services.

Risk-neutral

An attitude towards risk where an individual values all outcomes equally without preference for risk.

Risk-loving

A preference or inclination to undertake investment with uncertain outcomes, often with the potential for significant gains.

Utility

A measure of satisfaction, usefulness, or value that a consumer derives from consuming a good or service.