A Risk of Material Misstatement in Accounts Receivable Associated with the Accuracy

question 71

Multiple Choice

A risk of material misstatement in accounts receivable associated with the accuracy balance-related audit objective is that "sales recorded at the incorrect price result in revenue and accounts receivable that are over- or understated." Which of the following tests of detail of balances would respond to this risk?

• A)Select a sample of master file change forms and verify that all sales prices changes were appropriately authorized.
• B)Use audit software to match sales invoice price details to authorized prices in the sales price master files.
• C)Enquire with management with respect to the procedures used to update the sales price master file.
• D)Match shipping details for a sample of invoices to the invoice details on an item by item basis.

Grasp the effects of tax elasticity on demand and supply and the resultant deadweight losses.

Comprehend the ability-to-pay and benefits principles of taxation.

Identify the characteristics of regressive taxation systems.

Analyze the impact of excise taxes on consumer and producer surplus.

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Definitions:

Idealism

A philosophical approach that asserts reality is fundamentally mental or spiritual in nature, emphasizing the importance of ideals, values, and moral principles.

Economic Value Orientation

A focus on actions and decisions that maximize economic value and financial health for stakeholders.

Moral Philosophies

The study of moral principles and values that guide behavior in various contexts, concerning what is right and wrong.

Work-Related Decision

A choice or judgment made in the context of one's employment or job responsibilities.