A Retail Entity Uses Electronic Data Interchange (EDI) in Executing

question 819

Multiple Choice

A retail entity uses electronic data interchange (EDI) in executing and recording most of its purchase transactions. The entity's auditor recognizes that the documentation of the transactions will be retained for only a short period of time. To compensate for this limitation, the auditor most likely would:

• A) Increase the sample of EDI transactions to be selected for cutoff tests.
• B) Perform tests several times during the year, rather than only at year-end.
• C) Plan to make a 100% count of the entity's inventory at or near the year-end.
• D) Decrease the assessed level of control risk for the existence or occurrence assertions.

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Definitions:

Multiproduct Firm

A company that markets and sells multiple product lines under one umbrella, often in related fields.

Customer Value

The valuation of a product or service by a consumer against its alternatives.

Strategic Marketing Process

A deliberate approach aimed at creating and implementing effective marketing strategies that align with a company’s overall goals and drive competitive advantage.

Visionary Organization

An organization characterized by its forward-thinking approach and strategic planning to innovate and shape its future industry or sector.