After Finishing the Review Phase of the Study and Evaluation

question 23

Multiple Choice

After finishing the review phase of the study and evaluation of internal control in an audit engagement, the auditor should perform tests of controls on:

• A) those controls that have a material effect upon the financial statement balances.
• B) a random sample of the controls that were reviewed.
• C) those controls that the auditor plans to rely upon.
• D) those controls in which significant deficiencies were identified.

---

Definitions:

Substitutes

Products or services that can be used in place of another, fulfilling a similar need or purpose for the consumer.

Costs Of Underpricing

Financial losses incurred when a product or service is sold for less than its market value or cost of production, often used as a strategy to enter new markets or increase market share.

Costs Of Overpricing

Consequences of setting a sale price too high, leading to reduced sales volume, customer dissatisfaction, and competitive disadvantages.

Demand

The level of demand for goods or services that individuals are eager and able to fulfill at various pricing tiers throughout a specific duration.