An Auditor Most Likely Would Limit Substantive Audit Tests of Sales

question 56

Multiple Choice

An auditor most likely would limit substantive audit tests of sales transactions when control risk is assessed as low for the occurrence assertion concerning sales transactions and the auditor has already gathered evidence supporting:

• A)opening and closing inventory balances.
• B)cash receipts and accounts receivable.
• C)shipping and receiving activities.
• D)cut-offs for sales and purchases.

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Definitions:

Procurement

The process of finding, agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process.

Ownership

The legal right or state of having control over property, a company, or an artifact.

Surplus

The amount by which production or supply exceeds demand or usage.

Production Sites

Locations where goods are manufactured or assembled, characterized by the presence of facilities and machinery for production.