An Auditor Plans to Examine a Sample of 20 Checks

question 57

Multiple Choice

An auditor plans to examine a sample of 20 checks for countersignatures as prescribed by the entity's internal control procedures. One of the checks in the chosen sample of 20 cannot be found. The auditor should consider the reasons for this limitation and:

• A)evaluate the results as if the sample size had been 19.
• B)treat the missing check as a deviation for the purpose of evaluating the sample.
• C)treat the missing check in the same manner as the majority of the other 19 checks (i.e., countersigned or not).
• D)choose another check to replace the missing check in the sample.

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Definitions:

Decay Theory

A theory that proposes memory fades due to the mere passage of time unless it is actively rehearsed.

Interference Theory

A theory that explains forgetting in the human memory as a result of conflicting information interfering with the retrieval of stored memories.

Forgetting

The loss or decline in the ability to recall or recognize something that was previously learned or experienced.

Prospective Memory

Recalling a previously planned intention or executing a predetermined action at a future date.