When Planning the Audit, If the Auditor Has No Reason

question 65

Multiple Choice

When planning the audit, if the auditor has no reason to believe that illegal acts exist, the auditor should:

• A)include audit procedures which have a strong probability of detecting illegal acts.
• B)still include some audit procedures designed specifically to uncover illegalities.
• C)ignore the issue.
• D)make inquiries of management regarding their policies for detecting and preventing illegal acts and regarding their knowledge of violations, and then rely on normal audit procedures to detect errors, irregularities, and illegalities.

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Definitions:

Net National Product

The total market value of all final goods and services produced by the residents of a country in a given time period, minus depreciation.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by a country in real terms.

Base Year

A specific year against which economic growth is measured, serving as a standard comparison for financial indices and economic data.

Economic Activity

All actions that involve producing, trading, selling, and buying goods and services within an economy.