Substantive Testing Is Typically Used to Audit Shareholders' Equity Because

question 20

Multiple Choice

Substantive testing is typically used to audit shareholders' equity because:

• A)the number of transactions is small.
• B)controls over shareholders' equity transactions are typically weak.
• C)a reliance strategy is most efficient.
• D)the control environment over shareholders equity transactions is usually strong.

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Definitions:

Full Employment GDP

The output level produced in an economy when labor resources are fully employed, but not over-employed.

Spending

The expenditure of money on goods, services, or other items by individuals, businesses, or governments.

Classical Economics

A school of economic thought, originating in the 18th and 19th centuries, that focuses on free markets and the idea that markets, if left unregulated, will naturally adjust to equilibrium over time.

Keynes

A reference to John Maynard Keynes, a British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.