Which of the Following Is Not True Relating to the Auditors

question 4

Multiple Choice

Which of the following is not true relating to the auditors' observation of the client's physical inventory?

• A)The auditors should evaluate the client's planning of the physical inventory.
• B)The auditors should supervise the taking of the inventory.
• C)The auditors should evaluate the adequacy of the client's counting procedures.
• D)The auditors should take test counts of the client's inventory.

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Definitions:

Market Failures

Occur when the market does not allocate resources efficiently on its own, leading to a loss of economic welfare.

Government Role

The activities undertaken by a government, including regulation, taxation, and public services provision, to guide and support the economy.

Economic Profits

The surplus after all costs, including opportunity costs, have been subtracted from total revenues.

Resource Reallocation

The process of distributing or redirecting resources from one use, area, or project to another to improve efficiency or address changing needs.