Which of the Following Is Most Closely Related to the Relevance

question 18

Multiple Choice

Which of the following is most closely related to the relevance of audit evidence?

• A) Auditors decide to physically inspect investment securities held by a custodian instead of obtaining confirmations from the custodian.
• B) In addition to confirmations of accounts receivable, auditors perform an analysis of the aging of accounts receivable to evaluate the collectability of accounts receivable.
• C) In response to less effective internal control, auditors increase the number of customer accounts receivable confirmations mailed compared to that in the prior year.
• D) Because of a large number of transactions occurring near year-end, auditors decide to confirm a larger number of receivables following year-end instead of during the interim period.

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Definitions:

Assimilation

The cognitive process where new information is integrated into existing cognitive schemas, beliefs, and understandings.

Accommodate

In cognitive psychology, to modify existing cognitive schemas, perceptions, or understandings to incorporate new information.

Formal Operations

The final stage in Piaget's theory of cognitive development, characterized by the ability to think abstractly, logically, and systematically.

Hypothetical Thinking

The process of exploring and considering possibilities or scenarios that are not real but are imagined for the purpose of discussion or problem-solving.