If No Material Fluctuations Are Found Using Analytical Procedures and the Auditor

question 75

Multiple Choice

If no material fluctuations are found using analytical procedures and the auditor concludes that differences should not have occurred,

• A)it will be necessary to increase the tests of details of balances.
• B)other tests may be reduced.
• C)it will be necessary to increase the tests of controls.
• D)it will not be necessary to perform tests of details of balances.

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Definitions:

Break-even Point

The break-even point is the level of production or sales at which total revenues equal total costs, resulting in no profit or loss.

Break-even

The point at which total revenues and total expenses are equal, resulting in no net loss or gain.

Monthly Dollar Sales

The total sales revenue earned by a business within a month, measured in dollars.

Variable Expenses

Costs that change in proportion to the activity of a business, such as sales or production levels.