When Dealing with Laws and Regulations That Do Not Have

question 163

Multiple Choice

When dealing with laws and regulations that do not have a direct effect on the financial statements, the auditor

• A) should inquire of management about whether the entity is in compliance with such laws and regulations.
• B) has no responsibility to determine if any violations of these laws has occurred.
• C) must report all violations, including inconsequential violations, to the audit committee.
• D) should perform the same procedures as for violations having a direct effect on the financial statements.

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Definitions:

Multidirectional Influences

The concept that development is shaped by bidirectional interactions among various factors, including biological, psychological, and socio-cultural forces.

Social-Cognitive Perspective

Views behavior as influenced by the interaction between people’s traits (including their thinking) and their social context.

Interactive Influences

The complex ways in which factors or variables interact with and influence each other.

Personality Traits

Characteristics and behaviors that are consistent over time and across situations, defining an individual.