In Performing the Audit of Internal Control Over Financial Reporting

question 11

Multiple Choice

In performing the audit of internal control over financial reporting the auditor emphasizes internal control over class of transactions because:

• A)the accuracy of accounting system outputs depends heavily on the accuracy of inputs and processing.
• B)the class of transaction is where most fraud schemes occur.
• C)account balances are less important to the auditor then the changes in the account balances.
• D)classes of transactions tests are the most efficient manner to compensate for inherent risk.

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Definitions:

Contrast Effect

Occurs when the meaning of something that takes place is based on a contrast with another recent event or situation.

Compared

The act of evaluating two or more items, ideas, or individuals to identify similarities, differences, or relative merits.

Recently Encountered

Recently encountered refers to something or someone that has been discovered, met, or dealt with in the near past.

Attribution Theory

A concept in psychology that explains how individuals pinpoint the causes of their own and others' behaviors and events.