Question

Question 1o (1.5 points What does Chapter 2 argue is the bestresource for getting to know a new industry? Reading a 10-K from a firm in the industry AICPA Audit and Accounting Guides Hoovers database IBIS database Question 17 (1.5 points) A firm's financial statements report a pre-audit estimated bad debt expense of $5 million. Auditor A views this estimate and subsequently estimates that S5.1 million is an ideal bad debt expense, whereas Auditor B creates her own independent estimate of S7 million bad debt expense beforeviewing the firm's estimate. Which common psychological bias has likely affected Auditor A's judgment? Anchoring and adjustment Availability bias Hindsight bias

Answer 1

Answer of Question 17, A Firm's pre-audited financial statement is contains estimated bad debts of $ 5 million. Auditor A estimated bad debts of $5.1 Million. Psychological bias effected auditor A 's decision from above option is Anchoring and Adjustment Bias. In Anchoring and Adjustment Bias person create a focal point (anchor) which is in this case $ 5 million of bad debts and make adjustment such that the result is fall near the focal point (anchor).