The Primary Objective of Compliance Testing in a Financial Statement

question 1

Multiple Choice

The primary objective of compliance testing in a financial statement audit is to determine whether:

• A)Procedures have been updated regularly.
• B)Financial statement amounts are accurately stated.
• C)Internal controls are functioning as designed.
• D)Collusion is taking place.

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Definitions:

T-Score

A standardized score that indicates how many standard deviations an element is from the mean.

Confidence Estimate

A range of values used to estimate a parameter, calculated in such a way that it is likely, to a specified level of confidence, to contain the true value of the parameter.

Confidence Interval

A set of values, calculated from sample statistics, predicted to hold the value of an unobserved population parameter.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values differ from the mean.