Auditing Sophisticated Financial Instruments Requires the Auditor to Obtain an Understanding

question 14

Multiple Choice

Auditing sophisticated financial instruments requires the auditor to obtain an understanding of all of the following except

• A)Risks and objectives of the instruments.
• B)Contracts and terms of the instrument.
• C)Financial accounting and disclosure for the instrument.
• D)Credit rating of the client purchasing the instrument.

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Definitions:

Intuitionist

A person who believes in or advocates for intuitionism, the theory that moral truths are known by intuition.

Emotional Reactions

Responses of the emotional system to stimuli or events, ranging from happiness and excitement to sadness and anger.

Moral Intuitions

The gut feelings or spontaneously formed judgments that influence our decisions on what is right or wrong without conscious reasoning.

Quick Gut Feelings

Rapid, intuitive judgments formed without conscious deliberation.