Why Is the Audit Team More Concerned with Controlling the Exposure

question 91

Multiple Choice

Why is the audit team more concerned with controlling the exposure to the risk of overreliance than with the risk of underreliance?

• A) Only the risk of overreliance results in an incorrect audit decision.
• B) The risk of underreliance is not related to the audit team's study and evaluation of internal control.
• C) The risk of overreliance can ultimately result in the audit team's failing to reduce audit risk to acceptable levels.
• D) The risk of underreliance can be controlled by performing tests of controls during the interim period.

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Definitions:

Need for Cognition

A psychological trait reflecting the extent to which individuals engage in and enjoy activities that require thinking and mental effort.

Intellectual Challenges

Tasks or problems that require significant mental effort or creativity to solve, often contributing to cognitive development or understanding.

Reflectiveness

The capacity to examine and analyze one's own thoughts, feelings, and actions critically and thoughtfully.

Field Dependence

a cognitive style characterized by a reliance on external frames of reference and the tendency to perceive and interpret information in terms of the total field.