When Selecting Items for Testing, the Auditor Concentrates Their Selection

question 26

Multiple Choice

When selecting items for testing, the auditor concentrates their selection on high dollar value items. This approach is:

• A) never appropriate in performing audit procedures under Australian auditing standards.
• B) not an audit sampling technique but is often an appropriate evidence collection technique.
• C) appropriate only if the auditor is undertaking statistical sampling.
• D) generally a useful and efficient method for all audit tests.

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Definitions:

Operation

In a business context, operation refers to the day-to-day activities necessary for running a company, which can include production, distribution, and the provision of services.

CCA Deductions

Refers to Capital Cost Allowance deductions in taxation, allowing businesses to claim depreciation on tangible capital assets.

CCA Tax Shield

Refers to the decrease in taxable income for businesses in Canada due to Capital Cost Allowance, which allows for the depreciation of tangible property to be deducted from taxable income.

Terminated Project

A project that has been ended prior to its completion due to various reasons such as feasibility, costs, or changes in strategy.