In Testing for Unrecorded Retirements of Equipment, an Auditor Most

question 25

Multiple Choice

In testing for unrecorded retirements of equipment, an auditor most likely would

• A) Select items of equipment from the accounting records and then locate them during the plant tour.
• B) Compare depreciation journal entries with similar prior-year entries in search of fully depreciated equipment.
• C) Inspect items of equipment observed during the plant tour and then trace them to the equipment subsidiary ledger.
• D) Scan the general journal for unusual equipment additions and excessive debits to repairs and maintenance expense.

Understand the significance of operating characteristic (OC) curves in acceptance sampling.

Recognize the principles of Six Sigma quality and its statistical requirements.

Describe acceptance sampling's role in quality control and its impact on decision-making.

Comprehend the factors influencing the development of an acceptance sampling plan including AOQ, AQL, LTPD, α, and β.

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Definitions:

Systematic Desensitization

A behavioral therapy technique used to reduce anxiety responses through gradual exposure to the feared object or situation, combined with relaxation exercises.

Aversive Conditioning

Associates an unpleasant state (such as nausea) with an unwanted behavior (such as drinking alcohol).

Client-Centered Therapy

A counseling approach emphasizing the therapist’s empathy and nondirective behavior that allows clients to lead the discussion and find their own solutions.

Marriage Counseling

A type of psychotherapy for married couples or established partners that aims to resolve conflicts, improve relationship satisfaction, and strengthen connections.