In Order to Determine the Extent of Testing of Controls

question 18

Multiple Choice

In order to determine the extent of testing of controls, _______.

• A)the auditor should inquire of management as to their preferences
• B)the auditor can use statistically based sampling techniques only
• C)the auditor can use either statistically based sampling techniques or nonstatistical techniques
• D)the auditor can use non nonstatistical techniques only

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Definitions:

Manufacturing

The process of converting raw materials or components into finished goods through the use of tools, machinery, and labor.

Wholesale

The sale of goods in large quantities at lower prices, typically to retailers who then sell them to the final consumer.

Retail

The sale of goods to the public in relatively small quantities for use or consumption rather than for resale.

Reorder Point

The inventory level at which an order should be placed to replenish stock before it runs out, based on lead time and demand.