Which of the Following Statements Concerning Noncompliance by Clients Is

question 23

Multiple Choice

Which of the following statements concerning noncompliance by clients is correct?

• A)An auditor's responsibility to detect noncompliance that has a direct and material effect on the financial statements is the same as that for errors and frauds.
• B)An audit in accordance with generally accepted auditing standards normally includes audit procedures specifically designed to detect noncompliance that has an indirect but material effect on the financial statements.
• C)An auditor considers noncompliance from the perspective of the reliability of management's representations rather than their relation to audit objectives derived from financial statement assertions.
• D)An auditor has no responsibility for noncompliance that has an indirect effect on the financial statements.

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Definitions:

Rating Scales

A method for assessing attitudes, feelings, behaviors, or performance by assigning values or ratings according to a predetermined scale.

Subjectivity

Subjectivity refers to how someone's judgment is shaped by personal opinions and feelings instead of outside influences, making it inherently individual and biased.

Inner Judgment

The process of evaluating one's own thoughts, actions, and emotions based on personal standards and beliefs.

Biases

Prejudices or inclinations that can influence judgment or decision-making, often in an unfair or dismissive manner.