In the Study of Internal Control,the Auditor Uses Sampling to Compare

question 64

Multiple Choice

In the study of internal control,the auditor uses sampling to compare the ______________ to the ______________.

• A) adjusted estimate of misstatement; overall materiality
• B) sampling risk; precision
• C) adjusted estimate of the deviation rate; tolerable rate of deviation
• D) precision interval; upper limit on misstatement

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Definitions:

Net Income

The final amount a company earns, which is the total revenue minus all expenses, taxes, and costs.

Net Loss

The amount by which expenses exceed revenues in a given period, resulting in a decrease in equity.

Debits And Credits

Accounting entries that are used to record transactions, where debits increase asset or expense accounts and decrease liability, equity, and revenue accounts, while credits do the opposite.

Income Statement

A financial statement that reports a company's financial performance over a specific period, detailing revenues, expenses, and net income.