The Least Likely Source of Information for the Auditor in Obtaining

question 46

Multiple Choice

The least likely source of information for the auditor in obtaining an understanding of the client's industry conditions is:

• A) industry Audit Guides.
• B) trade journals.
• C) industry statistics compiled by government or private agencies.
• D) data accumulated by the audit firm

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Definitions:

Recession

A phase of brief economic downturn marked by a decrease in business and manufacturing activities, typically recognized when there's a drop in Gross Domestic Product (GDP) for two consecutive quarters.

Price Ceiling

A government-imposed limit on how high a price can be charged on a product, intended to protect consumers from high prices, but can lead to shortages.

Shortage/Surplus

A market condition where the quantity demanded exceeds the quantity supplied (shortage) or the quantity supplied exceeds the quantity demanded (surplus).

Price Ceiling

a legally imposed maximum price on goods or services, above which they may not be sold to prevent market prices from rising too high.