An Analytical Procedure Related to the Substantive Testing of Cash

question 64

Multiple Choice

An analytical procedure related to the substantive testing of cash balances would be to _______.

• A)calculate cash as a percent of total assets and compare with auditor expectations
• B)calculate cash as a percent of total assets and compare with internal auditor expectations
• C)send notes payable confirmations to creditors
• D)send confirmations to the client firm's stockholders

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Definitions:

Price Sensitivity

The degree to which the price of a product affects consumers' purchasing behaviors.

Core Product

The fundamental benefit or solution that a customer receives from a product or service, which defines its primary value.

Commoditization

The process by which goods or services become undifferentiated in the eyes of the consumer, leading to competition primarily on price.

Discrepancy Of Quantity

A mismatch between the amount ordered and the amount delivered or received in a business transaction.