The Auditor Should Assess the Risk That Errors and Fraud

question 13

Multiple Choice

The auditor should assess the risk that errors and fraud may cause the financial report to be materially misstated and, based on that assessment:

• A) design the audit to provide reasonable assurance of detecting errors and fraud that are material to the financial report.
• B) plan the audit to search for errors or fraud that could be material to the financial report.
• C) perform the audit with an awareness that errors or fraud could occur and cause a material misstatement of the financial report.
• D) apply substantive tests to detect material misstatements except those perpetrated by means of forgery or collusion.

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Definitions:

Genetic Resistance

The natural ability of organisms and their genetic makeup to withstand and resist the effects of pathogens, pests, and other harmful agents.

Cervix

Narrow end of the uterus, which leads into the vagina.

Labor

The process of childbirth, starting from the onset of contractions to the delivery of the baby and placenta.

Dilation

The process of widening, stretching, or expanding.