An Auditor Selects a Sample of Items Recorded and Traces

question 28

Multiple Choice

An auditor selects a sample of items recorded and traces them back to the supporting documentation.This is an example of which of the following?

• A)Directional testing for existence.
• B)Directional testing for completeness.
• C)Direct testing for valuation.
• D)Direct testing for rights.

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Definitions:

Broken Leaf

Refers to a damaged leaf in a multi-leaf spring, often leading to vehicle suspension issues.

OEM Recommendations

Guidelines or advice given by the Original Equipment Manufacturer regarding the maintenance, use, or repair of their product.

Contribution Margin

The amount by which the sales of a product or service exceed the variable costs associated with its production, contributing towards covering fixed costs and generating profit.

Depreciation Expense

The allocated portion of the total cost of a company's physical assets that is expensed out on the income statement over a set period, reflecting the asset's consumption and wear and tear.