If the Upper Limit Rate of Deviation Exceeds the Tolerable

question 80

Multiple Choice

If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would most likely

• A) Accept the account balance as being fairly stated.
• B) Reject the account balance as being fairly stated.
• C) Increase the planned effectiveness of substantive procedures.
• D) Not increase the planned effectiveness of substantive procedures.

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Definitions:

Registration

The act of recording information or names officially, often for legal, official, or security purposes.

Snowmobile

A motorized vehicle designed for travel over snow, usually on runners with a treaded rear allowing for propulsion across snow-covered terrains.

Floating Charge

A debt security issued by a corporation in which assets of the corporation, such as stock-in-trade, are pledged as security. Until such time as default occurs, the corporation is free to dispose of the assets.

Creditor

An entity or person to whom money is owed by a debtor.