QUESTION 41 The external auditor needs to understand a client's internal controls in order to develop appropriate audit procedures. True False QUESTION 42 The auditor cannot be liable for fraud under statutory law. O True False QUESTION 43 The detection risk is equal to the audit risk divided by the inherent and control risks. True False QUESTION 44 The underlying data used in evaluating an account needs to be both relevant and reliable. True False QUESTION 45 Materiality is determined using quantitative benchmarks but not qualitative benchmarks. True FalseQUESTION 46 The objectives of the preparers of financial statements are always closely aligned with that of the users of the financial statements hence the need of external auditors to provide independent assurance. True False QUESTION 47 The auditor has the option of incorporating analytical procedures in the substantive procedures. True False QUESTION 48 Reliability is concerned with how convincing an audit evidence is. True False QUESTION 49 There is a strong likelihood of fraud if at least one of the three fraud factors are present. True False QUESTION 50 The Chief Marketing Officer (CMO) of Petrias and Co. inadvertently decreased the marketing expenses in the fourth quarter of 2018 causing an increase in profits for the year 2018. The decrease in the marketing expenses was considered material. During an investigation, the CMO argued that this was a transaction error and not fraud. The CMO is accurate in her argument. True False