The Extent of Procedures Is Affected Mostly by Which of the Following

question 60

Multiple Choice

The extent of procedures is affected mostly by which of the following factors?

• A)The sheer volume of procedures to be applied by the auditor.
• B)The time of year in which the client takes a physical inventory in the warehouse.
• C)The auditor's judgment that misstatements are probable in certain balances.
• D)The availability of the client's staff at or near the balance sheet date.

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Definitions:

Periodic Inventory System

An inventory system that updates inventory balances at the end of a period, relying on physical counts to measure stock levels.

Detailed Records

Comprehensive, accurate documentation of transactions, activities, or events, maintained for reference and compliance.

Goods Held for Resale

Refers to items that a company has in its inventory that are purchased with the intention of being sold to customers rather than being used in the production process.

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting overheads, payroll, taxation, and interest.