When Planning the Audit Sample

question 99

Multiple Choice

When planning the audit sample,

• A) one objective of the tests of controls is to test the effectiveness of the controls.
• B) audit sampling applies to analytical procedures.
• C) audit sampling generally applies to automated controls.
• D) the auditor must generalize from the sample to the population.

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Definitions:

Merchandise Inventory

Goods available for sale, reported as a current asset on a company's balance sheet.

Income Statement

A financial document that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and profits.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholders' equity at a specific point in time.

Ending Inventory

The total value of a company's merchandise or goods that have not been sold at the end of an accounting period.