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16) When dealing with laws and regulations that do not have a direct effect on the financial statements, the auditor: A) should inquire of management about whether the entity is in compliance with such laws and regulations. B) has no responsibility to determine if any violations of these laws has occurred. C) must report all violations, including inconsequential violations, to the audit committee. D) should perform the same procedures as for violations having a direct effect on the financial statements. 17) Which of the following statements is usually true? 18) Auditing standards make ________ distinction(s) between the auditor's responsibilities for searching for errors and fraud. 19) In comparing management fraud with employee fraud, the auditor's risk of failing to discoverthe fraud is: 20) Misappropriation of assets: A) is generally committed by company management.
B) harms the users of the financial statements by providing them incorrect financial data for their
C) causes harm to stockholders because the assets are no longer available to their rightful owners. D) causes the financial statements to be misstated since the misappropriation usually involves material amounts. 21) When comparing the auditor's responsibility for detecting employee fraud and for detecting errors, the profession has placed the responsibility: