Auditors Have Found That Generally the Most Efficient and Effective

question 76

Multiple Choice

Auditors have found that generally the most efficient and effective way to conduct audits is to

• A) obtain complete assurance about the correctness of each class of transactions affecting the account.
• B) obtain some combination of assurance for each class of transactions and for the ending balance in the related accounts.
• C) obtain assurance about the ending balance of the account only.
• D) verify each entry that was made into an account.

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Definitions:

Present Value Factor

A factor used to calculate the present value of a cash flow to be received in the future.

Cash Payback Period

The period of time required for the return on an investment to "repay" the original capital cost of the investment.

Desired Rate

The desired rate often refers to the target interest rate set by central banks, or it could imply the expected return rate on investments by individuals or businesses.

Capital Investment Analysis

Evaluation processes used by businesses to assess the potential profitability and risk of investment opportunities.