The Tendency for Auditors to Blindly Follow the Prior Year's

question 8

Multiple Choice

The tendency for auditors to blindly follow the prior year's audit file when conducting the current year's audit is an example of which type of judgment bias?

• A)Representative heuristic.
• B)Availability.
• C)Confirmation.
• D)Anchoring.

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Definitions:

Subsidiary Ledger

A detailed ledger that contains the supporting documents for a specific main account, such as accounts payable or receivable, to keep the general ledger uncluttered.

General Journal

A primary accounting record where financial transactions are initially recorded, before posting to specific accounts in the ledger.

Credit Entries

Accounting entries that increase liabilities, equity, and income accounts, or decrease asset and expense accounts.

Special Journal

A financial journal designed for recording a specific type of transaction in a more efficient manner, such as sales or purchases.