When the Client Has a Large Number of Relatively Small

question 75

True/False

When the client has a large number of relatively small accounts receivable and the assessed level of control risk for receivables and related revenue transactions is high,the auditor is more likely to use negative confirmations.

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Definitions:

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that do not change with the level of production, such as salaries of supervisory staff and depreciation of factory equipment.

Disk Drives

Disk drives are data storage devices used for storing and retrieving digital information using one or more rigid rapidly rotating disks (platters) coated with magnetic material.

Financial Advantage

The benefit gained by making a decision or taking an action which results in a better financial position.

Traceable Fixed Costs

Costs directly associated with a specific business segment or product, which would disappear if the segment or product were discontinued.