Observation and Inspection May Provide the Auditor with Useful Information

question 11

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 assessments
• C)reports prepared by management
• D)the entity's plans and office expenses

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Definitions:

Cognitive Errors

Cognitive errors refer to systematic flaws or biases in human reasoning and perception that can lead to incorrect judgments, decisions, or interpretations.

Counterfactual Thinking

The psychological process of imagining alternative outcomes to events that have already occurred, often starting with "if only" scenarios.

Affective Forecasting

The ability to predict one’s emotional reactions to future events

Psychologists

professionals who study the human mind and behavior, offering insights and interventions for mental and emotional well-being.