Which Type of Audit Evidence Can the Auditor Use in Support

question 90

Multiple Choice

Which type of audit evidence can the auditor use in support of the 'accuracy of accounts receivable' audit objective?

• A) direct confirmation with customer
• B) examination of title for ownership of asset
• C) physical examination
• D) examination of invoice from vendor

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, often indicating the degree of profitability.

Marginal Decision Rule

A principle stating that an action should be taken if and only if the marginal benefits exceed the marginal costs.

ATC

Average Total Cost, which represents the total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

MR

Stands for Marginal Revenue, which is the additional income earned from selling one more unit of a good or service.