When Using the Test Data Approach

question 3

Multiple Choice

When using the test data approach,

• A) test data should include data that the client's system should accept or reject.
• B) application programs tested by the auditor's test data must be different from those used by the client throughout the year.
• C) select data may remain in the client system after testing.
• D) None of the above statements is correct.

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Definitions:

Rate of Return

The gain or loss on an investment over a specific period, expressed as a percentage of the investment's initial cost.

Interest Rate

The fee, shown as a percentage of the principal, that a lender requires from a borrower for the utilization of assets.

Purchase

The act of acquiring goods or services in exchange for money, constituting a financial transaction.

Compounded Annually

Refers to the process of earning interest on both the initial principal and the accumulated interest from previous periods on a yearly basis.