Which One of the Following Statements Is True? in Deciding

question 93

Multiple Choice

Which one of the following statements is True? In deciding on substantive tests of transactions

• A)some procedures are commonly employed on every audit regardless of the circumstances.
• B)all procedures are dependent on the adequacy of the controls and the results of the tests of controls.
• C)results obtained in the prior year's audit will not affect the procedures used this year.
• D)the materiality of the item will not influence the choice of procedures used.

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Definitions:

Price Takers

Firms or individuals who accept the market price as given and have no influence to alter the price of the good or service they are selling or buying.

Four-firm Concentration Ratio

A measurement that indicates the combined market share of the four largest firms in an industry, used to assess the degree of competition within the market.

Herfindahl Index

A measure of market concentration that is used to determine the amount of competition among firms within an industry.

Import Competition

The competition between domestic products and foreign products in a domestic market, affecting local industries.