Assume That Application of Analytical Procedures Revealed Significant Unexplained Differences

question 71

Multiple Choice

Assume that application of analytical procedures revealed significant unexplained differences between recorded amounts and the expectations (estimates) developed by the auditor.If management is unable to provide an acceptable explanation,the auditor should

• A) Consider the matter a scope limitation.
• B) Perform additional audit procedures to investigate the matter further.
• C) Intensify the audit with the expectation of detecting management fraud.
• D) Withdraw from the engagement.

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Definitions:

Executed Contract

A contract that has been completely performed by both parties.

Contractual Obligation

A duty or responsibility that is legally binding under the terms of a contract.

Obvious Terms

Conditions or elements in an agreement or contract that are clear and unmistakable to all parties involved, often not needing explicit statement or detailed explanation.

Quasi Contract

A fictional contract imposed on parties by a court in the interests of fairness and justice; usually, quasi contracts are imposed to avoid the unjust enrichment of one party at the expense of another.