A Risk of Material Misstatement in Accounts Receivable Associated with the Accuracy

question 71

Multiple Choice

A risk of material misstatement in accounts receivable associated with the accuracy balance-related audit objective is that "sales recorded at the incorrect price result in revenue and accounts receivable that are over- or understated." Which of the following tests of detail of balances would respond to this risk?

• A)Select a sample of master file change forms and verify that all sales prices changes were appropriately authorized.
• B)Use audit software to match sales invoice price details to authorized prices in the sales price master files.
• C)Enquire with management with respect to the procedures used to update the sales price master file.
• D)Match shipping details for a sample of invoices to the invoice details on an item by item basis.

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Definitions:

Competition

A situation in which entities strive against one another to gain objectives or advantages.

Conflict

A situation or process in which individuals or groups perceive opposition in needs, values, or interests, potentially leading to tension or disputes.

Emotional Conflict

Involves interpersonal difficulties that arise over feelings of anger, mistrust, dislike, fear, resentment, and the like.

Marketing Strategy

A comprehensive plan that outlines how a business will communicate the value of its products or services to potential customers to achieve its marketing goals.