With Respect to the Detection of Indirect- Effect Illegal Acts

question 68

Multiple Choice

With respect to the detection of indirect- effect illegal acts, auditing standards state that the auditor provides:

• A) no assurance that they will be detected.
• B) the same reasonable assurance provided for other items.
• C) assurance that they will be detected, if material.
• D) assurance that they will be detected, if highly material.

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Definitions:

For The Month

A phrase typically used to specify financial or operational activities or measurements within a specific month.

Variable Costing

An accounting method that only includes variable costs (costs that change with production levels) in the cost of goods sold and calculates fixed costs as period costs.

Net Operating Income

The total revenue from a business's operations minus its operating expenses, excluding taxes and interest.

Operating Loss

A situation where a company's operating expenses exceed its gross profits, indicating a negative profitability from business operations.