The Auditor Would Design Which of the Following Audit Tests

question 50

Multiple Choice

The auditor would design which of the following audit tests to detect possible monetary errors in the financial statements?

• A) control tests
• B) substantive analytical procedures
• C) risk assessment procedures
• D) tests of operating effectiveness of controls over revenue and cash

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

Coupon Interest Rate

The annual interest rate paid on a bond's face value by the bond's issuer, representing the interest income received by bondholders.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, including all interest payments and the repayment of principal.

Capital Gain Yield

The price appreciation component of a stock's total return, excluding dividends, expressed as a percentage of the initial price of the stock.