A Properly Planned and Performed Audit May Fail to Detect

question 8

Multiple Choice

A properly planned and performed audit may fail to detect a material misstatement resulting from fraud because

• A) Audit procedures that are otherwise effective may be ineffective for fraud that is concealed through collusion.
• B) An audit is planned and performed to provide reasonable assurance of detecting material misstatements caused by errors but not by fraud.
• C) The factors considered in assessing control risk indicated an increased risk of error but only a low risk of fraud in the financial statements.
• D) The auditor did not consider factors influencing audit risk for account balances that have effects pervasive to the financial statements taken as a whole.

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Definitions:

Brown Tree Frogs

A species of frog known for its distinctive brown color and ability to thrive in a variety of habitats, including urban areas.

Green Tree Frogs

A common name for various species of arboreal frogs known for their bright green color, often found in humid, forested areas.

Population

The total number of individuals of a specific species living within a particular geographical area.

Ecology

The branch of biology that studies the interactions among organisms and their biophysical environment, including both biotic and abiotic components.