An Auditor Obtains Knowledge About a New Client's Business and Its

question 57

Multiple Choice

An auditor obtains knowledge about a new client's business and its industry in order to:

• A)make constructive suggestions concerning improvements to the client's internal control.
• B)develop an attitude of professional skepticism concerning management's financial statement assertions.
• C)evaluate whether the aggregation of known misstatements causes the financial statements taken as a whole to be materially misstated.
• D)understand the events and transactions that may have an effect on the client's financial statements.

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Definitions:

Decision-Making Skills

Abilities relating to the process of making choices by identifying, assessing, and selecting among several alternatives based on reasoning and judgment.

Self-Determination

The right or ability of individuals and communities to make their own choices and decisions, free from external compulsion.

Internet Source

An original reference, document, or item of information that is available online on the internet.

Making Judgments

The process of forming opinions, conclusions, or decisions based on the assessment of information, evidence, or circumstances.