When Planning the Audit, If the Auditor Has No Reason

question 65

Multiple Choice

When planning the audit, if the auditor has no reason to believe that illegal acts exist, the auditor should:

• A)include audit procedures which have a strong probability of detecting illegal acts.
• B)still include some audit procedures designed specifically to uncover illegalities.
• C)ignore the issue.
• D)make inquiries of management regarding their policies for detecting and preventing illegal acts and regarding their knowledge of violations, and then rely on normal audit procedures to detect errors, irregularities, and illegalities.

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Definitions:

Aristotle

An ancient Greek philosopher and polymath whose works spanning politics, metaphysics, ethics, and logic are foundational to Western philosophy.

Scientific Reasoning

The methodological approach to problem-solving and understanding natural phenomena through hypothesis formation, experimental design, data analysis, and logical argumentation.

Hypothesis Testing

A statistical method used to determine if there is enough evidence in a sample of data to infer that a certain condition is true for the entire population.

Problem Identification

A rephrased definition: Initiating the problem-solving process by clearly recognizing and outlining an issue that needs to be dealt with.