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

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Definitions:

Active Transport

The process where molecules travel through a cellular membrane from an area of lesser concentration to an area of greater concentration, necessitating the use of energy.

Absorption

The process by which nutrients, drugs, and other substances are taken up from the gastrointestinal tract into the bloodstream.

Mastication

The act of grinding food with teeth before swallowing and digesting it.

Muscular Tunic

A layer commonly found in various hollow organs, like the gastrointestinal tract and bladder, composed of smooth or striated muscle that helps in movement or the maintenance of tone.