When Are Auditors Likely to Encounter Judgment Problems in the Use

question 4

Multiple Choice

When are auditors likely to encounter judgment problems in the use of analytical procedures?

• A)Whenever the auditor places reliance on management's explanations for unusual fluctuations in account balances without first developing independent expectations
• B)Whenever the auditor allows unaudited balances to unduly influence his/her expectations of current balances
• C)Whenever the auditor fails to consider the pattern reflected by several unusual fluctuations when trying to explain what caused them
• D)The auditor is likely to encounter judgment problems in each of the above instances.

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Definitions:

V-codes

Diagnostic codes used in health care to indicate factors that influence health status and contact with health services, which are not due to a disease or injury.

E-codes

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Neoplasms

Abnormal masses of tissue that form when cells grow and divide more than they should or do not die when they should.