An Auditor Is Least Likely to Test the Internal Controls

question 46

Multiple Choice

An auditor is least likely to test the internal controls that provide for:

• A)approval of the purchase and sale of marketable securities.
• B)vouching a sample of sales transactions to make sure each one has an accompanying shipping document.
• C)segregation of the functions of recording disbursements and reconciling the bank account.
• D)comparison of receiving reports and vendors' invoices with purchase orders.

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Definitions:

Inferential Statistics

A branch of statistics that uses a random sample of data taken from a population to describe and make inferences about that population.

Descriptive Statistics

Statistical methods that summarize and describe the features of a data set, including measures of central tendency and variability.

Hypotheses

Proposed explanations made on the basis of limited evidence as a starting point for further investigation, often tested statistically.

Confounding Variables

External variables that can affect the outcome of an experiment, making it difficult to establish a clear cause-and-effect relationship.