The Most Reliable Procedure for an Auditor to Use to Test

question 51

Multiple Choice

The most reliable procedure for an auditor to use to test the existence of a client's inventory at an outside location would be to:

• A)Observe physical counts of the inventory items.
• B)Trace the total on the inventory listing to the general ledger inventory account.
• C)Obtain a confirmation from the client indicating inventory ownership.
• D)Analytically compare the current-year inventory balance to the prior-year balance.

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Definitions:

Alternative Hypothesis

The hypothesis that proposes a significant difference exists between groups or variables, contrasting the null hypothesis.

Unemployment Rate

The unemployment rate is the percentage of the labor force that is jobless and actively seeking employment.

Null Hypothesis

A default hypothesis that there is no effect or no difference, and it is the hypothesis that researchers typically seek to disprove or reject through statistical tests.

Alternative Hypothesis

The hypothesis that proposes a significant difference, effect, or relationship between variables, tested against the null hypothesis in statistical analysis.