In Most Audits of Large Entities,control Risk Assessment Contributes to Audit

question 72

Multiple Choice

In most audits of large entities,control risk assessment contributes to audit efficiency,which means that

• A) The cost of substantive procedures will exceed the cost of control evaluation work.
• B) Auditors will be able to reduce the cost of substantive procedures by an amount more than the control evaluation costs.
• C) The cost of control evaluation work will exceed the cost of substantive procedures.
• D) Auditors will be able to reduce the cost of substantive procedures by an amount less than the cost of tests of controls.

Adjust and analyze the impact on the cash cycle due to operational changes.

Calculate the inventory period based on sales and cost of goods sold data.

Understand the relationships and differences between inventory, receivables, and payables turnover rates on the operating cycle.

Assess the effects of changes in periods of receivables, inventory, and payables on the cash cycle.

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Definitions:

Default

Default refers to the failure to repay a loan according to the terms agreed to in the promissory note.

Federal Unemployment Tax Return

This is a tax form filed by employers to report the federal unemployment taxes they have paid, used to fund state workforce agencies.