The Auditor Is Concerned About the Client's Compliance with Laws

question 38

Multiple Choice

The auditor is concerned about the client's compliance with laws and regulations that have an indirect impact on the financial statements.Because of the inherent limitations of an audit,there is an unavoidable risk that some material misstatements in the financial statements may be undetected.This risk is greater related to potential violations of laws and regulations for which of the following reasons?

• A)many government contracts refer to a specific set of regulations
• B)many government programs are subject to state and federal laws
• C)many laws and regulations do not affect the financial statements
• D)noncompliance may involve conduct designed to conceal the noncompliance
• E)whether an action constitutes noncompliance is a matter for determination by the board of directors
• F)both A and B
• G)both C and D
• H)both D and E

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Definitions:

Heart Valves

Structures within the heart that maintain unidirectional blood flow through the heart's chambers by opening and closing with each heartbeat.

Peripheral Vessels

Blood vessels that are outside of the heart and brain, including arteries, veins, and capillaries that supply the limbs and extremities.

Acute Myocardial Infarction

A medical emergency condition commonly known as a heart attack, caused by the interruption of blood flow to a part of the heart, resulting in heart muscle damage.

Nitroglycerine Drip

A medical treatment involving the administration of nitroglycerine through an IV to treat certain heart conditions by dilating blood vessels.