When Auditing a Client's Database, the Purpose of Extracting High

question 37

Multiple Choice

When auditing a client's database, the purpose of extracting high value and old invoices is to:

• A) Determine which vendors and employees have the same addresses.
• B) Determine potential invoices for review.
• C) Determine unusual relationships between high dollar amounts and past due invoices.
• D) Determine which invoices are open and are past due.

---

Definitions:

Capital Budgeting

The process of evaluating and selecting long-term investments compatible with the firm's goal of wealth maximization.

NPV

Short for Net Present Value, which is a financial metric used to evaluate the profitability of an investment or project, considering the time value of money.

IRR

Internal Rate of Return - a financial metric used to evaluate the profitability of potential investments, representing the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Salvage Value

The estimated residual value of an asset at the end of its useful life, often considered in depreciation calculations and asset disposal decisions.