An Auditor's Decision Either to Apply Analytical Procedures as Substantive

question 27

Multiple Choice

An auditor's decision either to apply analytical procedures as substantive tests or to perform tests of details usually is determined by the:

• A)availability of data aggregated at a high level.
• B)relative effectiveness and efficiency of the tests.
• C)timing of tests performed after the balance date.
• D)auditor's familiarity with industry trends.

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Definitions:

Vote Determination

The process by which decisions are made or leaders are chosen in a democratic system through the aggregation of individual votes.

Profit Maximization

The process or strategy of adjusting production and sale operations to achieve the highest possible profit.

Production Function

Describes the relationship between inputs used in production and the output generated from those inputs.

Output

The total amount of goods or services produced by a firm or economy over a specific period.