Observation and Inspection May Provide the Auditor with Useful Information

question 73

Multiple Choice

Observation and inspection may provide the auditor with useful information to support the information obtained from management and other employees related to the risk of material misstatement.The auditor might observe or inspect

• A)the entity's forecasts
• B)documents,records and internal control manuals
• C)decisions prepared by management
• D)the entity's plans and office expenses

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Definitions:

Humor

A quality of being amusing or comic, especially as expressed in literature or speech.

Informative Messages

Communications designed to convey knowledge and information to a receiver without an expectation of feedback.

Risks

Potential events or situations that may lead to loss or an undesired outcome.

Email Disadvantage

Refers to the potential negatives of using email, such as miscommunication, information overload, or lack of personal touch.