Which of the Following Is Not True Regarding Appropriate Tests

question 25

Multiple Choice

Which of the following is not true regarding appropriate tests of controls?

• A)The auditor selects controls that are important to the auditor's conclusion about whether the organization's controls adequately address the assessed risk of material misstatement for the relevant debt and equity accounts.
• B)The client's audit committee selects controls that are important to the auditor's conclusion about whether the organization's controls adequately address the assessed risk of material misstatement for the relevant debt and equity accounts.as of the client's year end.
• C)The auditor will select both entity-wide and transaction controls for testing.
• D)If the auditor wants to rely on controls for the financial statement audit,the auditor would test the operating effectiveness of those controls throughout the year.

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Definitions:

Annuity

An investment product providing a stable flow of payments, often employed to generate earnings for retired individuals.

Return

Return refers to the gain or loss generated on an investment over a particular period, expressed as a percentage of the investment's initial cost.

Discount Rate

The discount rate is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Discount Rate

The discount rate applied to the future cash flows of a financial instrument to determine its current value.