An Internal Auditor Plans to Use an Analytical Review to Verify

question 407

Multiple Choice

An internal auditor plans to use an analytical review to verify the correctness of various operating expenses in a division. The use of an analytical review as a verification technique would not be a preferred approach if.

• A) The auditor notes strong indicators of a specific fraud involving this account.
• B) The company has relatively stable operations which have not changed much over the past year.
• C) The auditor would like to identify large, unusual, or non-recurring transactions during the year.
• D) The operating expenses vary in relation to other operating expenses, but not in relation to revenue.

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Definitions:

Federal Government Expenditures

The total amount of money spent by the federal government of a country, covering all its operations, programs, and services.

National Defense

Activities and measures undertaken by a government to protect its country from external threats or military aggression.

Expenditure Item

A specific category of spending, either by an individual, organization, or government.

Corporate Income Taxes

Taxes levied on the net income (profit) of corporations by the government.