The Auditor Would Be Least Likely to Perform Early Substantive

question 10

Multiple Choice

The auditor would be least likely to perform early substantive testing of account balances when:

• A) a number of significant deviations from control policies and procedures were detected during tests of controls.
• B) variance reports do not distinguish between price and quantity variances.
• C) due to economic factors, fourth quarter activity this year is expected to be somewhat lower than prior year's.
• D) the client uses a natural business year instead of the calendar year.
• E) the taking of the client's inventory is performed at an early date.

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Definitions:

Educational Level

A measure of the highest degree or level of education an individual has completed.

Threshold

The minimum level of stimulation or the level at which a certain effect begins to be produced, often used in economics, psychology, and physical sciences.

Grades

Levels of quality or performance, often used to categorize or rank things such as academic results or material purity.

Employers

Individuals or organizations that hire and pay employees for their labor.