An Auditor Most Likely Would Limit Substantive Audit Tests of Sales

question 415

Multiple Choice

An auditor most likely would limit substantive audit tests of sales transactions when control risk is assessed as low for the occurrence assertion concerning sales transactions and the auditor has already gathered evidence supporting:

• A) Opening and closing inventory balances.
• B) Cash receipts and accounts receivable.
• C) Shipping and receiving activities.
• D) Cutoffs of sales and purchases.

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Definitions:

Frequent Use

Regular engagement or application of a service, product, or facility.

Colorful Murals

Large, often public, paintings or artworks on walls that are notable for their vibrant and diverse colors.

Commercial Bank

A financial institution that offers services such as accepting deposits, providing loans, and offering basic investment products to the public.

Strictly Business

Attitudes or actions that are focused solely on business matters, usually implying a formal or serious approach.