Which of the Following Is a Valid Statement About the Use

question 373

Multiple Choice

Which of the following is a valid statement about the use of visual observations during an audit engagement? 1. Visual observations can be used to detect ineffective controls, idle resources, and safety hazards. 2. Visual observations can be used during both preliminary survey and fieldwork stages of the audit engagement. 3. Visual observations can provide unsubstantiated facts to management if the internal auditor believes the information is useful. 4. Visual observations can assist an auditor in determining if a material observation should be communicated through informal means to the organization's senior management.

• A) 1 and 2 only
• B) 1 and 4 only
• C) 2 and 3 only
• D) 3 and 4 only

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Definitions:

Exchange Rate

The price at which one country's currency can be exchanged for another country's currency.

Domestic Investment

Domestic investment pertains to the total amount of money spent on capital goods, services, and structures within a country.

Loanable Funds Market

A market where borrowers and lenders interact, with the interest rate determined by the supply of and demand for loanable funds.

Curve Shift

A movement of a demand or supply curve to the left or right, indicating a change in some economic factor other than price.