In Obtaining Evidence Concerning the Cash Balance, the Auditor Performs

question 50

Multiple Choice

In obtaining evidence concerning the cash balance, the auditor performs the following procedures: Obtain bank statements directly from bank, prepare bank reconciliation, and verify all reconciling items. In this case, it is most likely that:

• A) detection risk is set at moderate to high.
• B) detection risk is set at low to very low.
• C) inherent risk is set at low.
• D) control risk is set at moderate to low.
• E) detection risk is set at minimum to moderate.

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Definitions:

Committment

The act of dedicating oneself to a cause, activity, or purpose with earnest intention. This is another way of expressing dedication or pledge.

Potential Coalition

A group of parties or individuals that could come together to form an alliance based on shared interests or goals, though they have not yet done so.

Proactive Action

Proactive action involves taking initiative and actions in anticipation of future problems, needs, or changes rather than reacting to events after they occur.

Critical Mass

The minimum amount or number required for a specific process, such as a chain reaction, to occur or to sustain itself.