A Factor That Auditors Consider When Determining the Type of Substantive

question 21

Multiple Choice

A factor that auditors consider when determining the type of substantive procedure to use is _______.

• A)the assessed level of risk for the assertion
• B)the assessed level of risk for the control
• C)the cost of the procedure, and if management will be able to afford it
• D)the recommendations of management

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Definitions:

Opportunity Cost

Forgoing the potential gains from various choices by settling on one option.

Supplying Division

The unit or segment within a larger organization responsible for providing materials, products, or services to another division or department.

Transfer Price

The price charged for goods and services transferred between departments or divisions of the same company or between related entities.

Buying Division

A department within a company responsible for purchasing goods, materials, and services required for the business operations.