The Analytical Procedure That Requires the Auditor to Review the List

question 102

Multiple Choice

The analytical procedure that requires the auditor to review the list of accounts payable for unusual or non-vendor payables would have the best chance of discovering which possible error?

• A) classification error for non-trade liabilities
• B) invalid accounts or misstatements
• C) unrecorded accounts or misstatements
• D) misstatement of accounts payable and expenses

---

Definitions:

Target Cost

The desired cost to produce a product, determined by subtracting a desired profit margin from a competitive market price.

Target Margin

A predefined profit goal set by a company for a product, project, or the entire organization to achieve within a specific timeframe.

Target Price

Target price is the anticipated selling price of a product or service, set by a company, that reflects its market position and is intended to attract its identified target market.

Allowable Cost

This refers to the maximum cost that can be incurred on a project while still achieving the desired level of profit or meeting budget constraints.