When Undertaking Tests of Controls for Revenues, Auditors Are More

question 1

Multiple Choice

When undertaking tests of controls for revenues, auditors are more concerned with controls associated with the occurrence assertion than they are with the completeness assertion because:

• A)clients are more likely to overstate than understate revenues.
• B)clients are more likely to understate than overstate revenues.
• C)it is difficult to determine when services have been performed.
• D)the allowance for doubtful accounts is often understated.

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Definitions:

Fed

Informally refers to the Federal Reserve System, the central banking system of the United States, responsible for monetary policy.

Credit Availability

The ease with which individuals or businesses can obtain loans or access credit from financial institutions.

Military-Industrial Complex

A concept referring to the close relationship between a country's military and the defense industry that supplies it, often suggesting influences on national policy.

Federal Funds Rate

The interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight, used by the Federal Reserve to influence economic conditions.