The Following Is an Excerpt from an Audit Engagement Workpaper

question 273

Multiple Choice

The following is an excerpt from an audit engagement workpaper: A Company Accounts Receivable Date Objective. To determine if the computer system is correctly recording all accounts receivable transactions. Procedures: Judgmental selection of a sample of all accounts receivable balances greater than $50,000 for positive confirmation of balances. Conclusion: Based on the results of testing wherein all but three confirmations were returned, the accounts receivable balance is fairly presented in all material respects. Which of the following is true regarding the workpaper?

• A) It is not appropriate to judgmentally select a sample when testing accounts receivable.
• B) A conclusion should be reached only for the results of overall testing, not for individual procedures.
• C) The audit procedures used are not consistent with the audit objective.
• D) The format of the workpaper does not conform to the standard format for workpapers.

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Definitions:

Visual Perception Task

An activity designed to assess how an individual interprets visual stimuli.

Group Opinion

The collective perspective or consensus reached by a group of individuals.

Majority

The greater part or number; the number over half of a total.

Conform

To adjust one's behavior or beliefs to align with the standards, norms, or expectations of a group or society.