In Order to Obtain Audit Evidence About Account Balances, Many

question 37

Multiple Choice

In order to obtain audit evidence about account balances, many tests of controls may be enhanced by the added activity of tracing the sampled items from the inventory compilation report and verifying that the compilation amounts agree with the general ledger. This enhanced test would be considered a:

• A) substantive procedure.
• B) dual-purpose test.
• C) walkthrough.
• D) physical inventory count.

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Definitions:

Attrition

The process of reducing something's strength or effectiveness through sustained attack or pressure.

Experimental Design

A methodology for conducting research that involves planning, conducting, and evaluating experiments to test hypotheses.

Correlations

Statistical measures that describe the extent to which two or more variables move together, without necessarily implying causation.

Internal Validity

The degree to which an experimental design is capable of eliminating confounding variables, ensuring that the results can be confidently attributed to the cause-and-effect relationship being tested.