As Part of the Assessment of Control Risk,the Auditor Decided

question 24

Multiple Choice

As part of the assessment of control risk,the auditor decided to use audit sampling.After specifying the audit objectives,what would the auditor most likely do next?

• A)Determine the sample size.
• B)Select the sample.
• C)Perform tests of control procedures.
• D)Define the deviation conditions.

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Definitions:

Current Ratio

A liquidity ratio that measures a company’s ability to pay short-term and long-term obligations, calculated as current assets divided by current liabilities.

Total Current Assets

The sum of all assets likely to be converted into cash within a year, including cash, marketable securities, accounts receivable, and inventory.

Total Current Liabilities

These are obligations that a company is required to pay within one year or within the normal operating cycle.

Working Capital

The variance between a business's immediate assets and its short-term obligations, signalling its ability to meet short-term debts.