If the Population Is Not Considered Acceptable, One Step the Auditor

question 124

Multiple Choice

If the population is not considered acceptable, one step the auditor is likely to take is to

• A) retest all internal controls.
• B) ask the client to adjust the account balance.
• C) test the entire population.
• D) decrease inherent risk.

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Definitions:

Marginal Cost Function

A mathematical representation showing how the cost of producing one additional unit of a good changes as production volume changes.

Optimal Output

The level of production that maximizes a firm’s profit or minimizes its cost under given conditions.

Profit

The financial gain acquired when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Industry Supply Curve

A graph that shows the relationship between the price of a good and the total output of the industry for that good.