While Performing a Follow-Up of a Concern About Equipment-Inventory Tracking

question 76

Multiple Choice

While performing a follow-up of a concern about equipment-inventory tracking, which course of action is not necessary for the auditor to take?

• A) Ensure that the steps being taken resolve the condition disclosed by the initial finding.
• B) Ensure that controls have been implemented to prevent the issue from occurring again.
• C) Ensure that the entity has begun to experience benefits as a result of resolving the issue.
• D) Ensure that the inherent risk has been eliminated as a result of resolving the issue.

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Definitions:

Investment Amounts

The total funds allocated by individuals or businesses towards investment vehicles like stocks, bonds, or real estate for the purpose of earning returns.

Required Rate

The minimum return or yield that investors expect to receive on an investment, taking into account the risk level and market conditions.

Cost of Capital

The rate of return a company must earn on its investments to satisfy its investors or lenders.

Hurdle Rate

The minimum rate of return that an investment project must generate before it is considered viable or attractive for investment.