In Auditing a Manufacturing Entity,which of the Following Procedures Would

question 32

Multiple Choice

In auditing a manufacturing entity,which of the following procedures would an auditor least likely perform to determine whether slow-moving,defective,and obsolete items included in inventory are properly identified?

• A)Examine inventory items for dust or rust during observation.
• B)Trace tag counts to final inventory listing.
• C)Compare inventory balances to anticipated sales volume.
• D)Review inventory experience and trends.

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Definitions:

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution, affecting the shape of the distribution.

P-values

P-values provide the probability of obtaining an effect at least as extreme as the one in your sample data, assuming the truth of the null hypothesis.

Standard Error

A statistic that measures the average distance that a sample statistic, such as the mean, deviates from the actual population mean.

Alternative Hypothesis

A statement that contradicts the null hypothesis and is tested directly in a hypothesis testing framework, assuming the null hypothesis is false.