Which One of the Following Forms of Evidence Would Be

question 99

Multiple Choice

Which one of the following forms of evidence would be LEAST persuasive in forming the auditor's opinion?

• A) the auditor's count of marketable securities
• B) responses to auditor's questions by the president and controller regarding the investments account
• C) minutes of the board of directors authorising the purchase of shares as an investment
• D) correspondence with a stockbroker regarding the quantity of the client's investments held by the broker

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as sales volume or production levels.

Fixed Expenses

Costs that do not fluctuate with the volume of production or sales, such as rent, salaries, and insurance premiums.

Target Profit

The amount of net income a business aims to achieve within a specific period.

Break-Even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.