Which of the Following Is a True Statement About an Auditor's

question 54

Multiple Choice

Which of the following is a true statement about an auditor's evaluation of an accounting system?

• A) If a company has a haphazard accounting system then the auditor has greater confidence that the financial statements are reliable.
• B) If a company has an efficient and orderly accounting system then the auditor has greater confidence that the financial statements are reliable.
• C) If a company has an efficient and orderly accounting system then the auditor must do more detailed work to verify that the financial statements are reliable.
• D) None of these are correct.

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Definitions:

Norms

Unwritten rules that are socially enforced, guiding individual behavior within a group or society to ensure predictability and conformity.

Organizational Rules

Established guidelines and protocols within an organization that dictate the behavior, actions, and decisions of its members.

Groupthink

A psychological phenomenon occurring in a decision-making group where the desire for harmony or conformity results in an irrational or dysfunctional outcome.

Stereotypical False Assumptions

Erroneous beliefs or generalized ideas about a group or category of people that do not account for individual diversity and complexity, often leading to misunderstanding and discrimination.