Among Methods Used by Auditors in Gathering Evidence, What Are

question 72

Multiple Choice

Among methods used by auditors in gathering evidence, what are tests of control?

• A)Methods used to determine the operating effectiveness of the client's controls in preventing, or detecting and correcting, material misstatements at the assertion level.
• B)Methods designed to detect material misstatements at the assertion level.
• C)Methods used to gain an understanding of a client and its industry for the purpose of identifying risk of material misstatement.
• D)Methods used in the evaluation of financial information by studying plausible relationships among both financial and non-financial data.

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Definitions:

Industry Structure

The organizational composition and competitive dynamics of an industry, including the number and size of companies, entry barriers, and the extent of rivalry.

Threat of Entry

In business, it refers to the potential for new competitors to enter a market and disrupt existing players, impacting profitability.

Existing Competitors

Companies or entities that currently operate in the same market or industry as the subject company, offering similar products or services.

Consolidation Stage

A phase in the market cycle or an individual security's behavior marked by limited price movement and the accumulation or distribution of shares, preceding a breakout or breakdown.