After the Auditor Has Prepared a Flowchart of the Accounting

question 31

Multiple Choice

After the auditor has prepared a flowchart of the accounting system and control procedures surrounding sales, and assessed the design of the system, the auditor would perform tests of controls for all control procedures:

• A)documented in the flowchart.
• B)considered to be deficiencies that might allow errors to enter the accounting system.
• C)considered to be strengths that the auditor plans to use as a basis for an assessed level of control risk less than high.
• D)that would aid in preventing irregularities.

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Definitions:

Break-even Point

The point at which total costs and total revenues are equal, meaning a business or project is neither making a profit nor a loss.

Marginal Cost

The additional cost incurred from producing one more unit of a product or service, which can influence production decisions.

Marginal Revenue

The augmented income earned from trading one extra unit of a product or service.

Total Revenue

The entire sum of funds a company acquires from selling goods or offering services over a specific duration.