An Auditor Most Likely Would Limit Substantive Audit Tests of Sales

question 56

Multiple Choice

An auditor most likely would limit substantive audit tests of sales transactions when control risk is assessed as low for the occurrence assertion concerning sales transactions and the auditor has already gathered evidence supporting:

• A)opening and closing inventory balances.
• B)cash receipts and accounts receivable.
• C)shipping and receiving activities.
• D)cut-offs for sales and purchases.

Differentiate among data types and understand their significance in statistical analysis.

Comprehend the significance of cross-tabulation in data analysis.

Understand the broad scope of data availability and its implications on data analysis.

Identify tools and techniques for effective data analysis.

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Definitions:

Chargeout Rates

The rates charged to clients for services, often reflecting labor, overheads, and a margin for profit, used by consultancy and service-based businesses.

Billable Hour

The amount of time spent on a specific client's project that can be charged to that client, commonly used in legal and consulting services.

Realisation Rate

The percentage of billable hours or the revenue earned out of the total available hours or potential revenue, often used to measure the efficiency and profitability of professional services.

Chargeout Rate

The price charged by a business or professional for their services, often calculated to cover costs and generate profit.