Even When All Transaction-Related Audit Objectives Are Met, the Auditor

question 92

Multiple Choice

Even when all transaction-related audit objectives are met, the auditor will still rely primarily on substantive tests of balances to meet the following balance-related audit objective:

• A) realisable value
• B) presentations and disclosure
• C) rights and obligations
• D) A and C

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Definitions:

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and regulators, outlining revenue, expenses, assets, and liabilities.

Units

The individual elements or items produced or available in some quantity.

Variable Cost

Costs that change in proportion to the level of production or sales activity, such as raw material and labor costs.

Fixed Cost

Expenses that do not vary with the level of production or sales activity, such as rent, salaries, and insurance premiums.