The Auditor Has Decided That There Is a Risk of Material

question 40

Multiple Choice

The auditor has decided that there is a risk of material misstatement with respect to sales revenue.Which of the following audit tests should the auditor use to quantify the potential error?

• A)discuss the process used to assign credit limits with the sales manager and the controller
• B)send external confirmations to customers with accounts receivable balances
• C)determine whether all sales tested have a supporting customer purchase order
• D)determine whether all sales tested have a matching bill of lading

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Definitions:

Naval Blockade

A naval blockade is the deployment of naval vessels to prevent ships from entering or leaving ports belonging to or occupied by the enemy, used as a form of economic warfare.

Civil War

The Civil War was a conflict fought in the United States from 1861 to 1865, primarily over issues of slavery and states' rights, resulting in the preservation of the Union and the abolition of slavery.

Freedom and Liberty

Concepts centered on the right and ability of people to act and express themselves without undue restraint or coercion.

Abolition of Slavery

The movement or process of ending the practice of enslaving human beings, legally and socially.