When Control Risk for the Existence Assertion Is Assessed at a High

question 29

Multiple Choice

When control risk for the existence assertion is assessed at a high level,which of the following is a likely effect with respect to the auditors' confirmation of receivables?

• A)The account balances as of year-end will generally be confirmed.
• B)The auditors will in general use blank rather than positive confirmation requests.
• C)The auditors will be required to confirm accounts as of an interim date (during the year under audit)and as of year-end.
• D)Confirmation will not in general be used as the auditor will rely primarily upon support such as vendors' invoices,purchase orders and receiving reports.

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Definitions:

Aggregate Demand

The full volume of demand for goods and services in an economy, priced at a particular level, within a designated period.

Aggregate Supply

Aggregate supply represents the total amount of goods and services that producers are willing and able to supply at a given overall price level in an economy.

Stock Market Prices

The current price at which a share of a company is bought or sold in the stock market.

Aggregate Demand

The total demand for all goods and services within a particular market over a specific time period.