Which One of the Following Statements Is NOT Correct

question 7

Multiple Choice

Which one of the following statements is NOT correct?

• A) Internal controls vary from company to company; therefore, the auditor must identify the controls and deficiencies for each organisation.
• B) The substantive tests of transactions will vary depending on the assessed control risk.
• C) The tests of controls and substantive tests of transactions are combined where appropriate.
• D) The auditor must perform tests of controls on all of the client's internal controls.

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Definitions:

Reliability

The degree to which the result of a measurement, calculation, or specification can be depended on to be accurate.

Measurement

The process of obtaining a quantitative description of an attribute or phenomenon, often by comparing it to a standard unit.

Predictability

The ability to accurately forecast the outcome of a process or the occurrence of an event based on current knowledge or past experience.

Normal Distribution

A probability distribution that is symmetric around the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.