For Which of the Following Audit Tests Is an Auditor

question 31

Multiple Choice

For which of the following audit tests is an auditor most likely to use attribute sampling?

• A)Making an independent estimate of the amount of a FIFO inventory.
• B)Examining invoices in support of the valuation of fixed asset additions.
• C)Selecting accounts receivable for confirmation of account balances.
• D)Inspecting employee time cards for proper approval by supervisors.

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Definitions:

Accounts Receivable

Financial obligations customers have towards a business for availed goods or services which are unpaid.

Customers

Individuals or entities that purchase goods or services offered by a business.

Horizontal Analysis

Horizontal analysis is a financial analysis technique that compares historical financial data over a series of reporting periods, using the increase or decrease in absolute amounts and percentages to identify trends.

Income Statement

A financial statement that reports a company’s financial performance over a specific accounting period, detailing revenues, expenses, and profits or losses.