Which of the Following Is Not True with Respect to the Use

question 70

Multiple Choice

Which of the following is not true with respect to the use of systems techniques by auditors?

• A) Systems techniques assist the auditor in evaluating a client's internal control.
• B) Systems techniques replace audit working papers.
• C) Auditors rely on systems techniques to assist with compliance testing.
• D) Auditors use systems techniques as part of their documentation for their audit working papers.

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Definitions:

Economic Profits

The excess of total revenues over total costs, including both explicit costs and opportunity costs, indicating a return beyond the normal profit level.

Accounting Profits

The net earnings of a company as calculated by subtracting total expenses from total revenues, according to standard accounting practices.

Perfect Competitor

A theoretical market structure where many firms sell homogeneous products, entry and exit from the market are free, and all participants have perfect information.

Perfectly Elastic

Perfectly elastic describes a situation where the quantity demanded or supplied changes by an infinite amount in response to any change in price, represented graphically as a horizontal line.