Which of the Following Procedures Most Likely Would Provide an Auditor

question 47

Multiple Choice

Which of the following procedures most likely would provide an auditor with evidence about whether an entity's internal control activities are suitably designed to prevent or detect material misstatements?

• A) Performing analytical procedures using data aggregated at a high level.
• B) Re-performing the controls for a sample of transactions.
• C) Observing the entity's personnel applying the controls.
• D) Vouching a sample of transactions directly related to the controls.

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Definitions:

Prepaid Insurance

An asset account that represents insurance payments made in advance for coverage that extends over a future period.

Depreciation Expense

The orderly apportioning of the expense of a concrete asset over its expected lifetime, illustrating its decline in value as time progresses.

Factual Measurement

A term referring to the quantification of data that is based on facts and objectivity, often used in the context of scientific or financial analysis.

Accrued Salaries

Salaries that have been earned by employees but have not yet been paid by the company.