Question

Inherent limitations of an audit include the need to conduct an audit to achieve a balance between the benefit to management and the benefit to the auditors.

a. True
b. False

Answer 1

The inherent limitations of an audit relate to factors intrinsic to the auditing process, not a balance of benefits. The statement about the necessary and proper clause limiting national government power is false; it actually allows Congress to expand its powers.

Step-by-step explanation:

In response to the question about the inherent limitations of an audit, the statement is false. The inherent limitations of an audit do not stem from the need to balance benefits between management and auditors. Instead, they arise from factors such as the nature of financial reporting, the need for judgment, the use of testing, the timeliness of financial reporting, and the possibility of management override or fraud.

Regarding Exercise 9.3.1, the statement that the necessary and proper clause has limited the power of the national government is false. The necessary and proper clause, found in Article I, Section 8 of the U.S. Constitution, has actually been interpreted to grant Congress the flexibility to use powers not explicitly listed in the Constitution. This clause has been used to expand federal power and to justify the enactment of legislation that carries out the expressed powers.