All of the Following Are Advantages of the Test Data

question 26

Multiple Choice

All of the following are advantages of the test data technique except

• A)auditors need minimal computer expertise to use this method
• B)this method causes minimal disruption to the firm's operations
• C)the test data is easily compiled
• D)the auditor obtains explicit evidence concerning application functions

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Definitions:

Creditors' Claims

Rights of lenders to receive payment from a borrower or from a borrower’s assets.

Liabilities

Liabilities represent obligations or debts that a company owes to external parties, which are expected to be settled through the outflow of resources or services.

Assets

Resources owned or controlled by a business or individual, expected to bring future economic benefits.

Accounting Equation

The foundational principle of accounting representing the relationship between a company’s assets, liabilities, and equity: Assets = Liabilities + Equity.