The Smaller the Amount of Misstatement That the Auditor Can

question 138

Multiple Choice

The smaller the amount of misstatement that the auditor can tolerate, _______.

• A)the smaller the sample size
• B)the larger the sample size
• C)the larger the population size
• D)the lower inherent risk becomes

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Definitions:

Cash Over And Short

An account used to document discrepancies between physical cash counts and the accounting records, due to errors or theft.

Petty Cash Fund

A small amount of cash kept on hand for making immediate, minor expenses in a business.

Custodian

An entity or individual responsible for safeguarding and managing assets or securities, ensuring their safekeeping and proper administration.

Disbursements

Money paid out by a business or organization; expenses or amounts spent.