The Auditor Selects 25 Invoices for Testing and Detects No

question 57

Multiple Choice

The auditor selects 25 invoices for testing and detects no errors. As a result, she concludes that the expense account is fairly stated. Unbeknown to the auditor, the client has altered some of the invoices to reduce the amount reported as expense. This is an example of:

• A) an efficiency problem.
• B) incorrect acceptance.
• C) a sampling error.
• D) Both b and c.

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Definitions:

Labor Hours

The total number of hours worked by employees or workers within a specific period.

Market Costs

Expenses associated with buying or selling goods and services in a market environment, including production, distribution, and selling expenses.

Machine Milkers

Mechanical devices or systems used to extract milk from dairy animals, such as cows or goats.

Marginal Product

The supplementary production derived by adding one more unit of a particular input, with all else remaining constant.