The Case Titled "Expectations for Professional Judgment by Auditors to Detect

question 28

Multiple Choice

The case titled "Expectations for Professional Judgment by Auditors to Detect Fraud" suggests that:

• A)Fraud is a common element of audits.
• B)Auditors always detect fraud if they follow professional standards.
• C)Even an audit in accordance with professional standards can fail to detect a material fraud in the financial statements, particularly where management has gone to great lengths to cover up the fraud.
• D)Auditors should not be expected to uncover fraud since management always has the upper hand with respect to financial statement matters.

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Definitions:

EDNOS

Eating Disorders Not Otherwise Specified, a term formerly used for eating behaviors that do not fully meet the criteria for anorexia, bulimia, or binge eating disorder, now largely replaced by "OSFED" (Other Specified Feeding or Eating Disorder) in diagnostic manuals.

Binge-Eating Disorder

A serious eating disorder characterized by frequent episodes of consuming very large amounts of food followed by feelings of shame, distress, or guilt.

Bulimia Nervosa

Eating disorder characterized by binge eating followed by purging of food (vomiting).

Pepsin

Enzyme secreted by gastric glands that digests proteins to peptides.