For a Particular Account Balance Assertion, the Auditor Is Most

question 40

Multiple Choice

For a particular account balance assertion, the auditor is most likely to be able to avoid substantive tests of details with which of these set of risk assessments? $$\begin{array} { l l l l } & \underline {\text { Inherent }} & \underline {\text { Control }} & \underline {\text { Results of analytical procedures} } \\ A . & \text { Maxirmumn } & \text { MaximmInn } & \text { Unexpected } \\B.&\text { Maximum } & \text { Maximum } & \text { Expected } \\ C.&\text { Low } & \text { Low } & \text { Expected } \\D.&\text { Low } & \text { Low } & \text { Unexpected }\end{array}$$

• A) A
• B) B
• C) C
• D) D

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Definitions:

Cost Of Merchandise Sold

The total cost to a business of the goods sold to customers, including purchase price and additional expenses related to the sale.

Inventory Shrinkage

The loss of products between procurement and sale, often due to theft, damage, or administrative errors.

Losses Of Inventory

The reduction in the value of goods held for sale, due to theft, deterioration, or obsolescence.

Actual Inventory

The physical count and valuation of all goods available for sale or use at a specific time, often conducted through a physical inventory audit.