Audit Evidence Regarding the Separation of Duties Is Normally Best

question 80

Multiple Choice

Audit evidence regarding the separation of duties is normally best obtained by:

• A)preparing flowcharts of operational processes.
• B)preparing narratives of operational processes.
• C)observation of employees applying control activities.
• D)inquiries of employees applying control activities.

---

Definitions:

Real Interest Rate

The rate of interest an investor expects to receive after allowing for inflation, reflecting the true cost of borrowing or the true yield on an investment.

Desired Investment

The level of investment that businesses plan to undertake, based on their expectations of future profitability.

Net Capital Outflow

The difference between the domestic country's investment abroad and foreign investments within the country.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the real cost of borrowing and the real yield to investors.