An Auditor Is Considering Whether the Omission of the Confirmation

question 10

Multiple Choice

An auditor is considering whether the omission of the confirmation of investments impairs the auditor's ability to support a previously expressed unmodified opinion. The auditor need not perform this omitted procedure if:

• A)the results of alternative procedures that were performed compensate for the omission.
• B)the auditor's assessed level of detection risk is low.
• C)the omission is documented in a communication with the audit committee.
• D)no individual investment is material to the financial statements taken as a whole.

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Definitions:

y-Intercept Coefficient

The constant term in a linear regression model, representing the value of the dependent variable when all independent variables are set to zero.

Simple Linear Regression

A regression model that estimates the relationship between a dependent variable and one independent variable using a straight line.

Sum of Squares

A statistical measure that quantifies the total deviation of each observation from the mean, used in variance and standard deviation calculations.

Regression

A statistical method used to determine the strength and character of the relationship between one dependent variable and one or more independent variables.