An Auditor Plans to Examine a Sample of 20 Checks

question 57

Multiple Choice

An auditor plans to examine a sample of 20 checks for countersignatures as prescribed by the entity's internal control procedures. One of the checks in the chosen sample of 20 cannot be found. The auditor should consider the reasons for this limitation and:

• A)evaluate the results as if the sample size had been 19.
• B)treat the missing check as a deviation for the purpose of evaluating the sample.
• C)treat the missing check in the same manner as the majority of the other 19 checks (i.e., countersigned or not).
• D)choose another check to replace the missing check in the sample.

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Definitions:

Luxury Automobiles

High-end vehicles that offer superior comfort, performance, and amenities, often characterized by their higher price points and status symbol.

Franchised Specialty Goods

Retail products sold through outlets operating under a franchise agreement, often focusing on a niche market.

Rack Jobber

A company or individual who provides and stocks merchandise in stores, typically in specialty areas, and shares profits with the retailer or pays for shelf space.

Limited-Function Merchant Wholesaler

A wholesaler that offers a narrower range of services than full-service wholesalers, typically specializing in only certain kinds of products or functions.