Substantive Tests Must Be Designed to Tests Specific Audit Objectives

question 51

Multiple Choice

Substantive tests must be designed to tests specific audit objectives.
REQUIRED: For the following specific audit procedures, indicate the assertion that is being tested. Use the following letters, placing your response in the space provideD.
-Reperform check on accuracy of sales invoice pricing.

• A)Existence or occurrence
• B)Completeness
• C)Valuation or allocation
• D)Rights and obligations
• E)Presentation and disclosure

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Definitions:

Labor Resource

Human work effort, both physical and mental, utilized in the creation of goods and services.

Linear Production

A production process in which outputs are directly proportional to inputs, with a constant rate of output per unit of input.

Possibility Frontier

Also known as the production possibility frontier, it represents the maximum possible output combinations of two goods or services an economy can achieve with available resources and technology.

Production Possibility

The combination of goods and services that can be produced given available resources and technology, illustrating the trade-offs in production.