You Are Performing an Audit of Hawk Company

question 129

Multiple Choice

You are performing an audit of Hawk Company. In evaluating the accounts payable balance you are concerned with the completeness assertion. Which of the following audit procedures best satisfies your concern?

• A) Send confirmations to only vendors with large balances.
• B) Send confirmations to vendors with large, active, zero balance accounts and a representative sample of all others.
• C) Send confirmations to vendors chosen from sample stratified by the dollar balance.
• D) Send confirmations to all vendors.

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Definitions:

Coin Tosses

Simple random experiments representing the concept of probability, often used to decide between two equally likely outcomes.

Normal Model

A statistical model that assumes data follows a normal distribution, characterized by its bell-shaped curve.

Standard Deviation

A statistic that measures the dispersion or spread of a set of numbers from their mean; it quantifies variability or volatility.

Weights

Objects used to measure the mass of an item or used as a resistance for exercise and training.