An Auditor's Determination of a Lower Level of Control Risk

question 43

Multiple Choice

An auditor's determination of a lower level of control risk would most likely be associated with

• A)Larger population sizes for tests of controls.
• B)Larger samples for substantive procedures.
• C)Smaller samples for substantive procedures.
• D)Lower levels of detection risk.

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Definitions:

Restricted

Limited in extent, number, scope, or action.

Endowment Principal

The core capital in an endowment, which is invested to generate income while preserving the original amount.

Payout

The process of distributing funds by foundations and trusts to meet legal requirements or fulfill their mission.

Accrual Basis

An accounting method where revenue and expenses are recorded when earned or incurred, regardless of when cash transactions occur.