The Audit Evidence Gathering Technique of Recalculation Refers to

question 42

Multiple Choice

The audit evidence gathering technique of recalculation refers to

• A)sending bank confirmation to validate bank balances.
• B)rechecking prices as per price list.
• C)counting inventory.
• D)checking the calculation of amortization expense.

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Definitions:

Transactions Needs

The requirement for cash or liquid assets for the purpose of meeting immediate expenses or financial obligations.

Collection Float

The time period between when a payment is initiated by a payer and when the funds are available in the payee’s account.

Opportunity Costs

The benefit that is missed or foregone when choosing one alternative over another.

Trading Costs

Expenses associated with buying and selling securities, including broker commissions and spreads.