Which of the Following Is Not an Inherent Limitation in an Auditor's

question 120

Multiple Choice

Which of the following is not an inherent limitation in an auditor's ability to detect material misstatements relating to a client's compliance with laws and regulations?

• A)Laws and regulations often relate to operational issues within the entity that do not necessarily relate to the financial statements,so the information systems relating to financial reporting may not capture noncompliance.
• B)The legal implications of noncompliance are ultimately a matter for legal authorities to resolve,and are not a matter about which the auditor can resolve.
• C)Management may act to conceal noncompliance,or may override controls,or may intentionally misrepresent facts to the auditor.
• D)Auditors are not required to consider the applicable legal and regulatory frameworks that apply to the entity.

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Definitions:

Projective Tests

Psychological assessment tools that use ambiguous stimuli to uncover a person’s unconscious desires, fears, and struggles.

Objective Tests

Standardized assessments that measure an individual's knowledge, abilities, or traits without subjective judgement from the test giver.

MMPI

Minnesota Multiphasic Personality Inventory, a standardized psychometric test of adult personality and psychopathology.

CPI

An abbreviation for the California Psychological Inventory, a self-report inventory created to assess interpersonal behavior and social interaction.