Which of the Following Is Least Likely to Be Accurate

question 55

Multiple Choice

Which of the following is least likely to be accurate statement concerning characteristics of an audit?

• A)An analysis of inventory turnover addresses whether the proper method of determining inventory costs--as contrasted to market values--is being applied.
• B)Characteristics of the double entry bookkeeping system make it possible to test for overstated sales when tests of accounts receivable are being performed.
• C)The direction of tests for overstatement errors is generally directed from the recorded entry to source documents.
• D)Use of a perpetual rather than a periodic inventory system is likely to affect the nature of cutoff errors made at year-end.

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Definitions:

Mean (μ)

The average of a set of numbers, calculated by dividing the sum of these numbers by the count of numbers in the set.

Standard Deviation (σ)

An indicator that evaluates the degree of scatter or inconsistency of data points around the mean of the dataset.

Normal Model

A statistical model that assumes the data follow a normal (Gaussian) distribution.

Cutoff Value

A specific point on the scale of measurement that separates data into distinct classes or groups.