The Auditor Has Determined That the Perpetual Inventory Master Files

question 43

Multiple Choice

The auditor has determined that the perpetual inventory master files are high quality,assessing control risk related to physical observation of inventory as low.How does this affect audit testing? The auditor may

• A)reduce the extent of control tests over data entry to the master file.
• B)reduce the extent of the tests of physical inventory.
• C)reduce the extent of control tests with respect to program change controls.
• D)increase assessed inherent risks over the tests of physical inventory.

Recognize the laboratory findings consistent with hypoparathyroidism.

Understand the definition and purpose of theory in research.

Identify the relationship between concepts, constructs, and propositions within a theory.

Recognize how theories are developed and classified based on their scope and purpose.

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Definitions:

Compound Interest

A way of computing interest wherein the initial amount of the loan or deposit and all the interest that has accrued in former periods are included in the calculation.

Internal Rate of Return

A financial metric used to evaluate the profitability of an investment, calculated as the discount rate that makes the net present value of all cash flows equal to zero.

Present Value

The present financial value of a future money amount or stream of cash flows, calculated using a specific rate of return.

Annual Net Cash Flows

The amount of cash a company generates after all its expenditures, both operational and capital in nature, have been paid off within a fiscal year.