Which One of the Following Is a Proper Course of Action

question 54

Multiple Choice

Which one of the following is a proper course of action for the auditor when the total estimated misstatement exceeds the tolerable misstatement?

• A)The auditor can ask the client to correct the known misstatements.
• B)The auditor will analyze the detected misstatements for some common problems.
• C)The auditor can expand the sample.
• D)All of the above.

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Definitions:

Incurred

To suffer or become subject to an obligation, usually a cost or expense, as a result of one's actions or the operation of a business.

Accrual Accounting

A financial recording technique that logs income and expenditures at the time they are accrued or incurred, irrespective of the actual cash flow timing.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenues.

Sales

The total amount of revenue generated from goods or services sold by a business.