A Properly Planned and Performed Audit May Fail to Detect

question 55

Multiple Choice

A properly planned and performed audit may fail to detect a material misstatement resulting from fraud because:

• A)audit procedures that are otherwise effective may be ineffective for fraud that is concealed through collusion.
• B)an audit is planned and performed to provide reasonable assurance of detecting material misstatements caused by errors but not by fraud.
• C)the factors considered in assessing control risk indicated an increased risk of error but only a low risk of fraud in the financial statements.
• D)the auditor did not consider factors influencing audit risk for account balances that have effects pervasive to the financial statements taken as a whole.

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Definitions:

Cells

Biological units that are considered the smallest living organisms and fundamental building blocks of life.

Sources

Origins or providers of information, data, or resources, used in research, production, or any form of analysis.

Destinations

The intended final location or target where something or someone is directed, often associated with travel, logistics, and distribution.

Analytic Postoptimality

Analysis performed after an optimal solution has been found, to understand how changes to the parameters affect the solution's optimality.