An Auditor Should Recognize That the Application of Auditing Procedures

question 5

Multiple Choice

An auditor should recognize that the application of auditing procedures may produce evidence indicating the possibility of errors or fraud and therefore should:

• A)plan and perform the engagement with an attitude of professional skepticism.
• B)not rely on internal controls that are designed to prevent or detect errors or fraud.
• C)design audit tests to detect unrecorded transactions.
• D)extend the work to audit the majority of the recorded transactions and records of an entity.

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Definitions:

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs, representing the trade-offs between the two commodities.

Computers

Electronic devices that process, store, and output information, capable of executing complex algorithms and tasks.

Tested

The process of examining or evaluating something to determine its characteristics, quality, or performance.

Set Up

The process or action of making something operational or ready for use, especially in a context of preparation or installation.