When Using the Cycle Approach to Segmenting the Audit, the Reason

question 37

Multiple Choice

When using the cycle approach to segmenting the audit, the reason for treating capital acquisition and repayment separately from the acquisition of goods and services is that:

• A)the transactions are related to financing a company rather than to its operations.
• B)most capital acquisition and repayment cycle accounts involve few transactions, but each is often highly material and therefore should be audited extensively.
• C)both A and B are correct.
• D)neither A nor B is correct.

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Definitions:

Narrow Job Scope

Employment descriptions that are highly specialized or focused, with limited variety and breadth in the tasks performed.

Specialized Tasks

Tasks that require specific skills and knowledge, often contributing to the overall efficiency and effectiveness of operations.

Task Analysis

The process of breaking down a task into its component parts to understand the knowledge, skills, and processes required to complete it.

Arranging Work

The process of organizing tasks, responsibilities, and timelines to efficiently complete job duties or projects.