Substantive Audit Procedures Are Performed So That the Auditor May

question 6

Multiple Choice

Substantive audit procedures are performed so that the auditor may identify

• A) deficiencies in the design or operating effectiveness of internal controls.
• B) weaknesses in the effectiveness of the client company's audit committee.
• C) material misstatements in the client company's financial statements.
• D) Calculations and controls that mitigate the risk of fraud.

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Definitions:

Avoid Risk-Taking

A behavioral tendency to steer clear of actions or decisions that could lead to negative outcomes or uncertainties.

Abiding by Rules

The act of following established guidelines, regulations, or laws within a given context or environment.

Divergent Thinking

A cognitive approach or technique designed to produce inventive concepts through the examination of numerous potential answers.

Programmed Decision

involves using established procedures or rules to address recurring problems or situations, facilitating consistency and efficiency in decision-making.