An Auditor's Purpose for Performing Tests of Controls Is to Provide

question 90

Multiple Choice

An auditor's purpose for performing tests of controls is to provide reasonable assurance that:

• A)Controls are operating effectively.
• B)The risk that the auditor may unknowingly fail to modify the opinion on the financial statements is minimized.
• C)Transactions are executed in accordance with management's authorization and access to assets is limited by a segregation of functions.
• D)Transactions are recorded as necessary to permit the preparation of the financial statements in conformity with generally accepted accounting principles.

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Definitions:

Population Coefficient

A parameter that quantifies a certain characteristic or attribute of a population.

Correlation

A statistical measurement of the relationship between two variables, indicating how one may predict the other.

Coefficient of Determination

Denoted as R-squared, it measures the proportion of the variance in the dependent variable that is predictable from the independent variable(s) in a regression model.

Regression Line

A line that best fits the data points in a scatter plot, showing the relationship between two variables.