What Is the Most Likely Course of Action That an Auditor

question 588

Multiple Choice

What is the most likely course of action that an auditor would take after determining that performing substantive tests on inventory will take less time than performing tests of controls?

• A) Assess control risk at a low level.
• B) Perform both tests of controls and substantive tests on inventory.
• C) Perform only substantive tests on inventory.
• D) Perform only tests of controls on inventory.

Differentiate between various types of small business ownership and their operational impacts.

Recognize the role of demographic trends in shaping business opportunities for small enterprises.

Understand the impact of technological advances on small business operations and strategies.

Comprehend strategies for business downsizing and its effects on company structure and operations.

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Definitions:

Compounded Annually

An interest calculation method where interest is added to the principal sum once a year, allowing it to earn interest in the subsequent year.

Annuity

A finance tool that disburses a predetermined series of payments, typically to support individuals financially during retirement.

Future Value

The value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.

Retirement Income

The total income a person receives after retiring from work, which can come from pensions, savings, investments, and social security benefits.