The Auditing Standards Require the Auditor to Review the Procedures

question 60

Multiple Choice

The auditing standards require the auditor to review the procedures used to develop fair value estimates for investments to determine if they are consistent with the applicable financial reporting framework.To do this the auditor

• A)should consider reasons used by management in selecting the valuation model
• B)must consider assumptions used by management in selecting the valuation model
• C)should consider the timing used by management in selecting the valuation model
• D)should consider how the model is used to generate estimates of fair value
• E)must consider how the model is used to generate estimates of fair value
• F)both A and B
• G)both B and E
• H)both C and D

---

Definitions:

Unconscious Drive

Deep-seated desires and motivations that influence human behavior and thought processes, often without the individual's conscious awareness.

Prefrontal Cortex

The front part of the frontal lobe in the brain, crucial for executive functions such as decision making, social behavior, and personality.

Reticular Activating System

A network of neurons located in the brainstem that plays a crucial role in regulating arousal and sleep-wake transitions.

Awareness

The knowledge or perception of a situation or fact, often referring to the ability to directly know and perceive, to feel, or to be cognizant of events.