A Retailing Entity Uses the Internet to Execute and Record

question 54

Multiple Choice

A retailing entity uses the Internet to execute and record its purchase transactions. The entity's auditor recognizes that the documentation of details of transactions will be retained for only a short period of time. To compensate for this limitation, the auditor most likely would:

• A) Compare a sample of paid vendors' invoices to the receiving records at year-end.
• B) Plan for a large measure of tolerable misstatement in substantive tests.
• C) Perform tests several times during the year, rather than only at year-end.
• D) Increase the sample of transactions to be selected for cutoff tests.

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Definitions:

Capital Offense

A crime that is punishable by the death penalty, typically including the most serious offenses such as murder or treason.

Third-degree Felony

A category of crime considered less serious than first or second-degree felonies, but still criminally significant, subject to legal penalties including imprisonment.

Model Penal Code

A standardized set of criminal laws developed as a guideline to shape and modernize the penal laws of the United States.

Capital Offense

An offense for which the legal system can impose the death penalty.