When Dealing with Laws and Regulations That Do Not Have

question 163

Multiple Choice

When dealing with laws and regulations that do not have a direct effect on the financial statements, the auditor

• A) should inquire of management about whether the entity is in compliance with such laws and regulations.
• B) has no responsibility to determine if any violations of these laws has occurred.
• C) must report all violations, including inconsequential violations, to the audit committee.
• D) should perform the same procedures as for violations having a direct effect on the financial statements.

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Definitions:

Inventory

A paper-and-pencil test with questions about a person’s thoughts, feelings, and behaviors, which measures several dimensions of personality and can be scored according to a standard procedure.

Projective Test

A type of psychological test designed to let a person respond to ambiguous stimuli, potentially revealing hidden emotions and internal conflicts.

Introductory Psychology

A foundational course in psychology that covers various concepts, theories, and psychological practices, serving as an entry point for further study in the field.

Projective Testing

Projective testing is a psychological assessment technique where individuals respond to ambiguous stimuli, revealing hidden emotions, desires, and conflicts.