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:

Accountants

Professionals who perform accounting functions such as audits or financial statement analysis according to prescribed methods.

Inventory Valuation Method

The approach a company uses to determine the cost of its inventory, affecting the cost of goods sold and profitability; common methods include FIFO, LIFO, and weighted average.

Financial Statements

Formal reports detailing the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operating costs.