When an Auditor Becomes Aware of Possible Noncompliance by a Client,the

question 84

Multiple Choice

When an auditor becomes aware of possible noncompliance by a client,the auditor should obtain an understanding of the nature of the act to

• A) Evaluate the effect on the financial statements.
• B) Determine the reliability of management's representations.
• C) Consider whether other similar acts may have occurred.
• D) Recommend remedial actions to the audit committee.

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Definitions:

Working Memory System

A mental system that has a restricted ability and is in charge of briefly maintaining information ready for processing.

Short-Term Memory

The aptitude for storing a minimal amount of details in a directly accessible and active mode for a limited time span.

Deep Processing

A method of learning in which material is examined and understood at a deep, meaningful level, leading to better retention.

Elaboration

The process of adding more information to existing memories, making those memories more detailed and interconnected.