Auditors Perform Test of Controls and Substantive Tests of Transactions

question 61

Multiple Choice

Auditors perform test of controls and substantive tests of transactions for several reasons. Which of the following is not one of those reasons?

• A) for larger public company audits, to conclude the control is operating effectively
• B) to reduce assessed control risk and thereby reduce tests of details of balances
• C) to determine whether the exception rate in the population is sufficiently low
• D) to use rate of occurrence tests in the tests of details of balances

Identify examples of conditioned reinforcers.

Understand and differentiate between various schedules of reinforcement (fixed-ratio, variable-ratio, fixed-interval, variable-interval).

Recognize the importance and implications of operant conditioning in modifying behavior.

Comprehend the roles of cognitive processes and biological predispositions in learning.

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Definitions:

Profit Center

A business unit or department which is treated as a separate entity for the purpose of calculating its profitability.

Cost Center

A segment within an organization that is responsible for incurring costs, without directly contributing to the company’s income.

Sales Journal

A record of sales transactions where credit sales are recorded.

Gross Profit

The financial metric that represents the difference between sales revenue and the cost of goods sold, before deducting overheads, payroll, taxation, and interest payments.