If No Material Differences Are Found Using Analytical Procedures, and the Auditor

question 88

Multiple Choice

If no material differences are found using analytical procedures, and the auditor concludes that misstatements are not likely to have occurred:

• A) the number or extent of tests of details of balances may be reduced.
• B) it will be necessary to increase the tests of transactions.
• C) it will be necessary to increase the tests of balances.
• D) it will not be necessary to perform tests of balances.

---

Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, often defined as the percentage change in quantity demanded divided by the percentage change in price.

Grapes

Edible berries, typically growing in clusters on vines, that are used in a variety of products including wine, raisins, and fresh fruit.

Revenue-Maximizing Price

The optimal price of a good or service that maximizes the total revenue for a seller.

Demand Function

An equation that describes the quantitative relationship between the demand for a good and various factors affecting it, such as price, income, and price of related goods.