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In Order to Promote Audit Efficiency, the Auditor Considers Cost

question 42

Multiple Choice

In order to promote audit efficiency, the auditor considers cost in selecting audit tests to perform. Which of the following audit tests would be the most costly?


Definitions:

Mutually Exclusive

Situations or events that cannot occur at the same time—choosing one precludes the selection of the other.

Negative Net Present Value

A financial metric indicating that the present value of cash inflows is less than the present value of cash outflows, suggesting the investment is not financially viable.

Initial Cost

The upfront expense incurred to purchase an asset or to initiate a project.

Net Present Value

A calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account.

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