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When the Auditor Uses Tracing as an Audit Procedure for Tests

question 57

Multiple Choice

When the auditor uses tracing as an audit procedure for tests of transactions, he or she is primarily concerned with which audit objective?


Definitions:

Net Present Value

A calculation used to assess the profitability of an investment, measuring the difference between the present value of cash inflows and outflows over a period of time.

Payback Period

The time required for the return on an investment to repay the sum of the original investment.

Annual After-Tax Net Income

The amount of money a company earns in one year after all expenses and taxes have been deducted.

Profitability Index

A calculation that measures the relative profitability of an investment by dividing the present value of its future cash flows by the initial investment cost.

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