An Auditing Firm Has Developed a Set of Criteria for Determining

question 108

Short Answer

An auditing firm has developed a set of criteria for determining whether a particular account (and its balance)is in error.Historically,at companies where the gross sales are under $25 million,they know that of balances that were in error,75 percent were regarded as unusual.Assume Company A shows a history of only 10 percent of the account balances being in error and it also shows that 25 percent of the account balances were unusual.If in an audit,a particular account appears unusual,what is the probability that it is in error for Company A?

---

Definitions:

Nonverbal Communication

The process of conveying information or expressing emotions without the use of spoken language, through gestures, facial expressions, body language, and other cues.

Interpersonal Skills

Abilities that facilitate effective and positive communication and interactions between individuals.

Affective Outcome

Emotional or psychological consequences resulting from specific situations, interventions, or experiences.

On-The-Job Training

Training provided to employees at their place of work, offering hands-on experience and practical skills relevant to their job functions.