When Auditors Must Decide Which Type of Test to Select

question 17

Multiple Choice

When auditors must decide which type of test to select for obtaining sufficient appropriate evidence, the cost of obtaining the evidence is an important consideration. Rank the following types of tests in order of increasing cost: 1. Tests of controls
2) Substantive tests of transactions
3) Test of details of balances
4) Risk assessment procedures
5) Substantive analytical procedures

• A) 1, 2, 3, 4, and 5
• B) 2, 4, 3, 5, and 1
• C) 5, 4, 1, 2, and 3
• D) 5, 4, 3, 2, and 1

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Definitions:

Patient-visits

A measure used in healthcare to quantify the number of visits or interactions patients have with healthcare providers.

Customers Served

The number or segment of clients who receive services or purchase products from a business within a given time frame.

Revenue

The total amount of money received by a company for goods sold or services provided during a specific period.

Flexible Budget

A budget designed to adapt to changes in activity or volume levels, ensuring more accurate budgeting and variance assessments.