When the Auditor Is Attempting to Determine the Extent to Which

question 27

Multiple Choice

When the auditor is attempting to determine the extent to which external users rely on a client's financial statements, they may consider several factors except for:

• A) client size.
• B) concentration of ownership.
• C) types and amounts of liabilities.
• D) assessment of detection risk.

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Definitions:

Beliefs

Convictions or acceptances that something exists or is true, especially without proof.

Norms

Societal or group-established standards of behavior.

Perceptual Barrier

A cognitive obstacle that prevents individuals from accurately understanding or interpreting information from others.

Overgeneralizing

The cognitive bias of applying a general rule too broadly, based on limited evidence or a single example.