Under Which of the Following Circumstances Would It Be Advisable

question 100

Multiple Choice

Under which of the following circumstances would it be advisable for the auditor to confirm accounts payable with creditors?

• A) The internal accounting control over accounts payable is effective, and there is sufficient evidence on hand to minimize the risk of a material misstatement.
• B) The confirmation response is expected to be favorable, and accounts payable balances are of immaterial amounts.
• C) The creditor statements are not available and internal control over payables is deficient.
• D) The majority of accounts payable balances are with associated companies.

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Definitions:

Milgram's Study

An experiment conducted by psychologist Stanley Milgram in the 1960s to investigate obedience to authority figures, famously revealing people's willingness to follow orders that harm others.

Benefits Outweigh

A situation where the positive aspects or outcomes of a decision or action are more substantial than the negative ones.

Validity

The degree to which a concept, conclusion, or measurement is well-founded and likely corresponds accurately to the real world.

Reliability

Reliability in social science research refers to the consistency and dependability of measurement tools and methods, ensuring that studies can be replicated and results are stable over time.