Which of the Following Procedures Would an Auditor Most Likely

question 46

Multiple Choice

Which of the following procedures would an auditor most likely perform in planning a financial statement audit?

• A)Inquiring of the client's legal counsel concerning pending litigation.
• B)Comparing the financial statements to anticipated results.
• C)Examining computer-generated exception reports to verify the effectiveness of internal controls.
• D)Searching for unauthorized transactions that may aid in detecting unrecorded liabilities.

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Definitions:

Average Variable Cost

The total variable costs (costs that change with production volume) divided by the quantity of output produced.

Market Price

The going rate at which a product or service is available for buying or selling in a particular market.

Pure Competition

A market structure characterized by an extremely high level of competition, where no single buyer or seller has the power to influence prices or market conditions.

Agriculture

The practice of cultivating the land and raising livestock for food, fiber, and other products.