Which of the Following Auditing Procedures Probably Would Provide the Most

question 55

Multiple Choice

Which of the following auditing procedures probably would provide the most reliable evidence concerning the entity's assertion of rights and obligations related to inventories?

• A)Trace test counts noted during the entity's physical count to the entity's summarization of quantities.
• B)Inspect agreements to determine whether any inventory is pledged as collateral or subject to any liens.
• C)Select the last few shipping documents used before the physical count and determine whether the shipments were recorded as sales.
• D)Inspect the open purchase order file for significant commitments that should be considered for disclosure.

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Definitions:

Fiscal Policy

The use of government spending and taxation to stabilize the economy.

Economic Indicators

Statistical metrics that help assess the overall health and direction of an economy, guiding investment and policy decisions.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to estimate inflation.

Stock Price Index

A stock price index measures the value changes of a specified set of stocks, representing a segment of the stock market, to understand market trends and investment performance.