Audit Data Analytics (ADA)_______

question 39

Multiple Choice

Audit data analytics (ADA) _______.

• A)is effective not only for identifying general types of misstatements, but is also capable of identifying specific transactions or accounts that are likely to be misstated
• B)is effective only for identifying general types of misstatements
• C)is only capable of identifying specific transactions or accounts that are likely to be misstated
• D)is effective neither at identifying general types of misstatements or capable of identifying specific transactions or accounts that are likely to be misstated

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Definitions:

Work in Process

Inventory that includes goods that are in the process of being manufactured but are not yet completed.

Raw Materials Inventory

Items acquired for the purpose of processing into finished goods.

Finished Goods

Products that have completed the manufacturing process but have not yet been sold to customers.

LIFO Inventory Method

An inventory valuation method that assumes the last items placed in inventory are the first sold during an accounting period; stands for Last-In, First-Out.