The Auditor Would Like to Design a Test of Control

question 57

Multiple Choice

The auditor would like to design a test of control to test that statements are mailed to all customers each month.Which of the following typical tests of controls would be suitable?

• A)Inquire about who is responsible for mailing the statements.
• B)Find out whether customers pay by statement or by invoice.
• C)Reconcile subsequent payments to particular invoices.
• D)Match remittance advices from customers to customer statements.

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Definitions:

Acceptable Price

The price at which a consumer is willing to purchase a product or service, often considered fair by both the buyer and the seller.

Willing To Pay

The maximum amount an individual or entity is ready to spend to acquire a good or service or to avoid something undesirable.

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Economically Desirable

Characteristics or actions that are considered beneficial for the economy, potentially enhancing efficiency or growth.