When Planning a Sample for a Substantive Test of Balances

question 14

Multiple Choice

When planning a sample for a substantive test of balances, an auditor should consider tolerable misstatement for the sample.This consideration should:

• A) not be changed during the audit.
• B) be related to preliminary judgments about materiality levels.
• C) not be adjusted for qualitative factors.
• D) be related to the auditor's business risk assessment.

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Definitions:

Aggressively Seeking

Involves actively and intensely pursuing a specific goal or outcome, often in a competitive context.

Special Order

An order for goods or services that is outside the company's standard offerings, often requiring custom pricing and production considerations.

Minimum Price

The lowest price at which a product or service can be sold, often determined by costs, competition, or regulation.

Variable Manufacturing Cost

A cost that varies with the level of output production which includes direct materials, direct labor, and variable manufacturing overhead.