If Evidence Was Obtained in the Prior Year's Audit That

question 10

Multiple Choice

If evidence was obtained in the prior year's audit that indicates a key control was operating effectively:

• A) the extent of tests of that control may be reduced this year if the auditor determines that it is still in place.
• B) the tests of that control will be reduced this year.
• C) it will be unnecessary to test that control this year.
• D) the auditor would not test this area again this year.

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Definitions:

Balance on Current Account

Refers to the difference in value between a country's exports and imports of goods, services, investment incomes, and transfers.

Capital Account Balance

A component of the balance of payments which records net changes in a country's international financial assets and liabilities, including direct investment, portfolio investment, and other investments.

U.S. Dollar

The official currency of the United States and a primary reserve currency used globally in international transactions.

Foreign Exchange

The trading of currencies on the forex market, allowing for the conversion of one currency into another.