For Which of the Following Audit Tests Would an Auditor

question 93

Multiple Choice

For which of the following audit tests would an auditor most likely use attribute sampling?

• A) Making an independent estimate of the amount of a LIFO inventory.
• B) Examining invoices in support of the valuation of fixed asset additions.
• C) Selecting accounts receivable for confirmation of account balances.
• D) Inspecting employee time cards for proper approval by supervisors.

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Definitions:

Securities and Exchange Commission

A U.S. federal agency responsible for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry.

1933 Securities Act

A federal statute that requires securities sold in the U.S. to be registered and to disclose relevant financial information, aiming to protect investors from fraud.

General Solicitation

The act of publicly advertising or promoting an investment opportunity, often regulated by securities law to protect investors.

Noninvestment Company

An entity primarily engaged in operations other than investing, reinvesting, or trading in securities and does not qualify as an investment company under relevant regulations.