An Auditor Obtains Knowledge About a New Client's Business and Its

question 7

Multiple Choice

An auditor obtains knowledge about a new client's business and its industry in order to:

• A)make constructive suggestions concerning improvements to the client's internal control.
• B)develop an attitude of professional scepticism concerning management's financial report assertions.
• C)evaluate whether the aggregation of known misstatements causes the financial report taken as a whole to be materially misstated.
• D)understand the events and transactions that may have an effect on the client's financial report.

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Definitions:

Psychosocial Stages

Erikson’s eight developmental stages for the entire life span; each is defined by a conflict that must be resolved satisfactorily for healthy personality development to occur.

Lifespan

The maximum duration of life that an organism can theoretically achieve under optimal conditions.

Role Confusion

A situation in which an individual is uncertain about the expectations of their societal or personal role, often in Erikson's theory of psychosocial development.

Adolescence

The developmental stage that begins at puberty and encompasses the period from the end of childhood to the beginning of adulthood.