Auditors Are More Concerned with the Occurrence Assertion for Revenues

question 56

Multiple Choice

Auditors are more concerned with the occurrence assertion for revenues than the completeness assertion because:

• A)entities are more likely to overstate than understate revenues.
• B)entities are more likely to understate than overstate revenues.
• C)it is difficult to determine when services have been performed.
• D)the allowance for doubtful accounts often is understated.

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Definitions:

Degrees Of Freedom

The number of independent pieces of information upon which a statistical estimate is based, minus the number of parameters estimated.

T-Distribution

A probability distribution that is used in hypothesis testing for small sample sizes, where the population standard deviation is unknown.

Random Variable

A variable whose values depend on outcomes of a random phenomenon, with each outcome having a certain probability.

Confidence Interval

A breadth of values, derived from sample observations, with a high chance of containing an unknown population parameter's value.