Tests of Controls in the Finance and Investment Cycle

question 59

Multiple Choice

Tests of controls in the finance and investment cycle:

• A)normally focus on tests of transactions.
• B)primarily involve observing physical security of assets.
• C)typically amount to inquiries and observations related to management involvement.
• D)can significantly reduce the extent of substantive tests.

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Definitions:

Tightness

The quality or state of being fixed or secure, often referring to the absence of unwanted movement between parts.

Looseness

The state or condition of being not tightly fixed or securely attached, leading to undesired movement.

Tolerance Zone

The acceptable range of deviation from a specified dimension that a part can exhibit and still meet the necessary specifications.

Metric Fits

The standard for sizes and tolerances in metric system used to determine suitable fits between mating components.