Which of the Following Factors Would Lead an Auditor to Assess

question 36

Multiple Choice

Which of the following factors would lead an auditor to assess inherent risk at a higher level?

• A)The account balance is easily determined without estimation.
• B)The account balance is composed of a high volume of nonroutine transactions.
• C)The account balance is composed of simple transactions.
• D)All of the above would lead the auditor to assess a higher level of inherent risk.

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Definitions:

Credit Manager

A professional responsible for overseeing a company's credit granting process and managing the credit risks and policies.

Accounts Receivable

Payments pending from customers to a business for items or services that have been supplied but not yet remitted.

Cash Manager

An individual or team responsible for managing a company's cash flow to meet operational needs and investment goals.

Cash Cycle

The duration of time it takes a company to convert its investments in inventory and other resources into cash flows from sales.