In Connection with the Examination of Financial Statements by an Independent

question 27

Multiple Choice

In connection with the examination of financial statements by an independent auditor,management suggests that members of the internal audit staff be utilized to minimize audit costs.Which of the following tasks could most appropriately be delegated to the internal audit staff?

• A) Selection of accounts receivable for confirmation, based upon the internal auditor's judgment as to how many accounts and which accounts will provide sufficient coverage.
• B) Preparation of schedules for negative accounts receivable responses.
• C) Evaluation of the internal control for accounts receivable and sales.
• D) Determination of the adequacy of the allowance for doubtful accounts.

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Definitions:

Opec

The Organization of Petroleum Exporting Countries, an intergovernmental organization of oil-producing countries that coordinates and unifies petroleum policies.

Oligopoly

A market structure characterized by a small number of large firms that have significant control over market prices and competition.

Game-Theory

A mathematical framework used for analyzing situations in which players make strategic decisions that affect the outcomes of all participants.

Games-Of-Chance

Activities in which outcomes are determined primarily by random factors, usually for gambling or entertainment purposes.