When a Client Uses Perpetual Inventory Records, the Tests of Details

question 107

Multiple Choice

When a client uses perpetual inventory records, the tests of details of balances for inventory can be significantly reduced if the auditor believes the records are accurate. The controls over the acquisitions included in the records are normally tested as a part of the

• A) tests of controls for acquisitions.
• B) tests of controls and substantive tests of transactions for acquisitions.
• C) tests of details of balances for acquisitions.
• D) analytical procedures and tests of controls for acquisitions.

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Definitions:

Social Norms

Shared guidelines or rules that dictate acceptable and expected behavior within a society or group.

Social Facilitation

The process by which a person’s performance is increased when other members of a group engage in similar behavior.

Arousal

The physiological and psychological state of being awoken or stimulated to action.

Cognitive Tendencies

Cognitive tendencies are patterns or biases in thinking and decision-making, such as heuristics or cognitive biases, that influence how individuals interpret information.