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:

Strike Price

The fixed price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying asset.

Market Value

The total value of a company, measured through the market price of its outstanding shares.

Equity

The value of an asset after deducting the amount of liabilities or the ownership interest in a firm.

Call Contract

A financial contract that gives the holder the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.