Auditors Should Develop a Written Audit Program So That

question 78

Multiple Choice

Auditors should develop a written audit program so that:

• A)All material transactions will be included in substantive testing.
• B)Substantive testing performed prior to year-end will be minimized.
• C)The procedures will achieve specific audit objectives related to specific management assertions.
• D)Each account balance will be tested under either a substantive test or a test of controls.

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Definitions:

Main Effect

The overall impact of an independent variable on a dependent variable in a factorial design, disregarding interactions.

Rule Of 72

A simple formula used to estimate the number of years required to double the invested money at a given annual rate of return, by dividing 72 by the expected rate of interest.

Compounding

Compounding refers to the process by which the value of an investment increases because the earnings on an investment, both capital gains, and interest, earn interest as time passes.

Compounded Monthly

A process where interest earned on an investment is calculated and added to the principal each month, thereby earning interest in subsequent months.