Which of the Following Procedures Would Not Be Used to Obtain

question 40

Multiple Choice

Which of the following procedures would not be used to obtain an understanding of the entity and its environment?

• A)Observe entity operations.
• B)Reperform entity processes.
• C)Verify proper valuation of inventory subject to technological obsolescence.
• D)Review prior year's audit documentation.

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Definitions:

Substantially Performed

A legal concept indicating that a contract has been fulfilled enough to meet its essential requirements, despite minor variances from the exact terms.

Concurrent Conditions

In a contract, terms under which each party’s performance is conditioned on the performance of the other; occur only when the parties are required to perform for each other simultaneously.

Extrinsic Rewards

Rewards provided by an external source, such as money, grades, or praise, which can motivate behavior that might not occur otherwise.

Intrinsic Rewards

Motivational rewards that are internal to the individual, such as personal satisfaction, a sense of achievement, or a feeling of fulfillment.