After the Auditor Has Prepared a Flowchart of the Internal

question 3

Multiple Choice

After the auditor has prepared a flowchart of the internal controls surrounding sales and evaluated the design of the system, the auditor would perform tests of controls on all control activities:

• A)documented in the flowchart.
• B)considered to be weaknesses that might allow errors to enter the accounting system.
• C)that the auditor plans to rely on.
• D)that would aid in preventing fraud.

---

Definitions:

Significance Level

The threshold under which a result of a statistical test is considered statistically significant, often denoted by alpha (α).

Independent Variable

A variable that is manipulated to observe its effect on a dependent variable, considered the cause in cause-and-effect relationships.

Positive and Significant

A description of statistical results indicating that an effect or difference is both greater than zero and statistically unlikely to be due to chance alone.

Significance Level

A statistical measure that determines the threshold of rejecting the null hypothesis, typically represented by alpha (α), such as 0.05 (5%).