Which of the Following Courses of Action Would an Auditor

question 47

Multiple Choice

Which of the following courses of action would an auditor most likely follow in planning a sample of cash disbursements if the auditor is aware of several unusually large cash disbursements?

• A) Set the tolerable deviation rate at a lower level than originally planned.
• B) Identify the large and unusual disbursements as individually significant and test 100 percent.
• C) Increase the sample size to reduce the effect of the unusually large disbursements.
• D) Continue to draw new samples until all the unusually large disbursements appear in the sample.

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Definitions:

Production

The process of creating goods or services, involving tasks such as design, raw material procurement, fabrication, assembly, and testing.

Service Provider

A company or individual that offers services to others in exchange for payment, often in sectors like telecommunications, information technology, and healthcare.

Governments

Entities responsible for governing a geographic area and its population, including making and enforcing laws, managing public resources, and providing services to citizens.

Establishing Prices

The process of determining the selling price of goods or services, taking into account factors like costs, market demand, competition, and desired profit margins.