Considering that an auditor changes the audit plan considering that there could be fraud, the order of reasoning used is higher-order reasoning. Alternative c. is correct.
The auditor is engaging in higher-order reasoning by considering the potential strategic motivations and behaviors of management that may lead to the concealment of fraud. This type of reasoning involves making predictions, analyzing complex situations, and considering multiple perspectives to come up with a plan of action.
The auditor is modifying the audit plan based on a sophisticated understanding of the situation and potential risks involved.
In conclusion, Alternative c. Higher-order reasoning is correct.
The full question is as follows:
An auditor adjusts the audit plan by introducing unexpected audit procedures in response to what the auditor believes management may be doing to conceal a fraud based on management's strategic reasoning. Which order of reasoning is occurring here?
a. Zero-order reasoning
b. First-order reasoning
c. Higher-order reasoning
d. Low-order reasoning