Why Is Having Sufficient Knowledge of the Client's Business and Industry

question 55

Multiple Choice

Why is having sufficient knowledge of the client's business and industry is critical to performing a proper review of the client's statements?

• A)To provide reasonable assurance that the financial statements are free of material misstatement.
• B)To determine the proper sample size for substantive test procedures to be performed.
• C)To assess the plausibility of the information reported.
• D)To support the opinion expressed in the review engagement report.

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Definitions:

Hypnosis

A trance-like state of focused attention and heightened suggestibility, with diminished peripheral awareness.

Susceptible

Likely to be influenced or harmed by a particular thing due to vulnerability or lack of resistance.

Memory Errors

Mistakes or distortions in the recall of experiences or information, which can occur due to various cognitive and emotional factors.

Hypnosis

A trance-like mental state of heightened focus and concentration, induced by suggestion, used therapeutically to modify behaviors, perceptions, or psychological states.