The Purpose of Tests of Controls Is to Determine That

question 23

Multiple Choice

The purpose of tests of controls is to determine that:

• A)Internal control policies and procedures are functioning as prescribed.
• B)The extent of further audit procedures can be reduced.
• C)Errors and irregularities are prevented or detected in a timely manner.
• D)The auditor has an understanding of internal control.

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Definitions:

Barriers To Entry

Elements that obstruct or impede the ability of businesses to penetrate a particular market or sector.

Elasticity Coefficient

The elasticity coefficient measures how much the quantity demanded or supplied of a good responds to a change in one of its determinants, such as price, income, or the price of related goods.

Perfectly Elastic

Describes a market situation where demand or supply can change infinitely with even the slightest change in price.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing and able to purchase at each price point.