If the Auditor Has Obtained a Reasonable Level of Assurance

question 143

Multiple Choice

If the auditor has obtained a reasonable level of assurance about the fair presentation of the financial statements through understanding internal control, assessing control risk, testing controls, and analytical procedures, then the auditor

• A) can issue an unqualified opinion.
• B) can significantly reduce other substantive tests.
• C) can write the engagement letter.
• D) needs to perform additional tests of controls so that the assurance level can be increased.

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Definitions:

Functional Fixedness

A cognitive bias that limits an individual to use an object only in the way it is traditionally used, hindering problem-solving and creativity.

Restructuring

Restructuring refers to the process of changing the organization or structure of something, often used in contexts of cognitive restructuring in psychology to change patterns of thinking.

Working Backward

A problem-solving strategy that involves starting from the desired goal and using steps in reverse order to reach the initial condition.

Subgoals

Intermediate goals set within the path to achieve a larger, primary goal, often used to organize and direct efforts effectively.